Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

QUESTIONS TO MINISTERS

Mr. Heffer: On a point of order. I wish to have your guidance, Mr. Speaker. I have a Question to the Prime Minister on the subject of 2 per cent. unemployment. When I left the House in the early hours of this morning, the Question was still down for the Prime Minister to answer. As far as I know, there has been no notification, yet I discover that this Question has been transferred to the Chancellor of the Exchequer. It is now No. 89 and, therefore, will not be reached. In view of the importance of this subject, may I have your guidance about what action I may now take over this matter.

Mr. Speaker: The only action which the hon. Member may take is to take up the matter with the Prime Minister. Mr. Speaker has no responsibility for the transfer of Questions.

PRIVATE BUSINESS

LIVERPOOL CORPORATION (GENERAL POWERS) BILL [Lords]

Read a Second time and committed.

Oral Answers to Questions — LOCAL GOVERNMENT

Rate Rebate Scheme

Mr. Winnick: asked the Minister of Housing and Local Government what steps are being taken to give greater publicity to the rate rebate scheme.

The Minister of Housing and Local Government (Mr. Anthony Greenwood): There has been a series of advertisements

in the daily and Sunday Press during October to remind people to put in their applications for the second rebate period. I am also hoping to arrange further publicity on television and radio and, in the New Year, to have leaflets made available to people drawing pensions and family allowances.

Mr. Winnick: Would my right hon. Friend not agree that in the beginning there was a complete failure to publicise this excellent scheme? Is he aware that in Croydon there were 800 last-minute applications because of the added publicity? Could he say whether people who come along after the last month will be able to receive the full rebate and will not be discriminated against because they happen to be late?

Mr. Greenwood: I cannot agree that there has been no publicity. There have been 3 million leaflets, broadcasts on radio and television and two Ministerial notices to ratepayers in the Press. It is true that the crash programme which we undertook at the end of September had a marked effect. I asked local authorities to treat late applicants with generosity, but to go as far as the hon. Member suggests would require legislation, and I can hold out no hope of that.

Captain W. Elliot: Is the right hon. Gentleman aware that there are considerable anomalies in the operation of the Bill? Is he aware that one person with a small income and owning a house but working to supplement his income would get a considerable rate rebate, whereas another person owning a house and letting a couple of rooms and having no more income cannot get it? Will he look into this?

Mr. Greenwood: That is a very different point.

Greater London Council (Public Relations Office)

Mr. Boyd-Carpenter: asked the Minister of Housing and Local Government what explanation he has now received from the Greater London Council of their announced intention to set up a new Public Relations Office at an annual cost in excess of £600,000 a year; and whether he is now satisfied that such an increase in local authority


expenditure by such a proposal is in accordance with Government policy.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Robert Mellish): The Greater London Council do not owe my right hon. Friend any explanation in this matter. But he understands that the appropriate Committees of the Council have now reviewed their current and future programme in the light of Government policy and have determined on considerable economies in their estimates for various services, including the public information service.

Mr. Boyd-Carpenter: Does that Answer mean that the new project is shelved in toto, or is it merely to be reduced in size? Has the hon. Gentleman obtained from the Council any information about its sense of priorities in introducing this service at this time when the Government themselves are reducing local authority health and welfare services by £3 million a year?

Mr. Mellish: The right hon. Gentleman's prejudice against the Greater London Council is well known. It is not only the largest authority in Britain but the largest in the world. I should have thought that the fact that it intended to have a public relations service would be welcomed, even by him. However, this is a matter entirely for the Council and not one in which my right hon. Friend can interfere.

Planning Appeals

Mr. Geoffrey Lloyd: asked the Minister of Housing and Local Government how many appeals from decisions of planning authorities are now pending with him; and what measures he is taking to expedite the disposal of such appeals.

Mr. Wingfield Digby: asked the Minister of Housing and Local Government when he proposes to introduce legislation to alter the procedures for town and country planning.

Mr. Awdry: asked the Minister of Housing and Local Government when he proposes to introduce legislation to change the system of planning appeals along the lines outlined by his predecessor on 24th May, 1966.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): The

number was 7,179; a drop of about 1,500 since the beginning of the year. The basis of recruitment for inspectors has been broadened; the departmental organisation for handling appeals has been strengthened; and local planning authorities are being asked to co-operate in arrangements to cut down delays. My right hon. Friend is also considering more radical changes, which would involve legislation and will make his intentions known before long.

Mr. Lloyd: Does not the Minister think that it might be better if planning authorities were required to inform adjacent occupiers of planning and development proposals so that they could, if necessary, make corrections in the first place instead of having to wait and clog up the appeal machinery?

Mr. MacColl: That suggestion would probably increase rather than diminish the speed, although there may be something to be said for it on merits.

Mr. Digby: Is the hon. Gentleman aware that these appeals cause a lot of dissatisfaction and that the Minister said as long ago as 24th May that he would consider changes in appeal procedure? When are those changes to me made?

Mr. MacColl: My right hon. Friend is not complacent about this problem at all. We have decided 273 more appeals in the last quarter of this year than last, and, as I have already said, we have cut down the accumulation by 1,500, so I do not think we have done badly.

Mr. Awdry: Does not the hon. Gentleman consider that arranging for some appeals to be heard on a regional basis would save time?

Mr. MacColl: We are considering the whole question of appeals with a view to possible changes.

Mr. Rowland: Would not my hon. Friend consider setting up regional offices of the Ministry of Housing and Local Government, instead of leaving this work in the hands of purely local authorities?

Mr. MacColl: That suggestion sounds like a reform of local Government, which is a matter for the Royal Commission.

Mr. Rippon: Can the hon. Gentleman say what the present time-lag is between the inquiry and the giving of a decision?

Mr. MacColl: On average, it takes about 46 weeks for appeals by inquiry


and 31 weeks if the appeals are settled by written procedure.

Horsham Town Centre (Report)

Mr. Hordern: asked the Minister of Housing and Local Government if he will publish his inspector's report made following the public inquiry of the proposed redevelopment of Horsham town centre.

Mr. MacColl: My right hon. Friend will publish the report when he announces his final decision.

Mr. Hordern: The Minister must appreciate that, when considering his decision, there will be no harm whatever, if the outline suggestions are accepted, in publishing the inspector's report straight away. What possible objection can there be, if it is correct that the implications of his decision are already well known?

Mr. MacColl: What have been published already are proposals for changing the final decision, but it has always been the normal practice not to publish the report until the final decision because that might involve discussion of the whole of the inspector's report, which would not be relevant to the matters under inquiry.

Rating Act, 1966

Mr. Wingfield Digby: asked the Minister of Housing and Local Government whether he will shortly introduce legislation to amend the Rating Act, 1966.

Mr. Greenwood: No, Sir.

Mr. Digby: Is it not becoming increasingly evident that the disregards are a quite inaccurate forecast of the position? I ask the Minister not to be stubborn about this and to look at the facts as they are?

Mr. Greenwood: I do not think it is a question of being stubborn. The House debated this at considerable length. All of us have great sympathy for the class of people for whom the hon. Gentleman is primarily concerned, but the House expressed its opinion only this year. It is much too early to talk about amending legislation.

Mr. Blenkinsop: Is the Minister aware of the great welcome there has been in the country for the very large number

of cases throughout the country who have gained benefit from this Act, unlike its predecessor, where hardly anybody got any benefit at all?

Mr. Greenwood: I appreciate what my hon. Friend has said. The purpose of the Act was to reduce the impact of rates on people on low incomes from any source at all, and it compares very favourably, as my hon. Friend said, with the proposals put forward by hon. Members opposite. The amount disbursed so far is about 40 times what it was under the previous Tory Government.

Mr. Ridsdale: Would the Minister stop being complacent, particularly with regard to disabled people? Does the Minister realise that the Act at the present moment is causing grave hardship to people who fought in the First World War and who have to have a dependant living with them? Would he look into this and see if he can do something about it?

Mr. Greenwood: I do not think that anything I have said indicates complacency. If there was complacency, it was on the part of the previous Government.

Historic Towns (Pilot Survey)

Mr. Derek Page: asked the Minister of Housing and Local Government what will be the cost of the pilot survey of historic towns; and how this cost is to be apportioned.

Mr. MacColl: The consultants fees for these studies are being negotiated separately for each of the towns, and the total amount has not yet been settled It is proposed that the cost should be shared equally between my Department and the local authorities concerned.

Mr. Page: Does not the Joint Parliamentary Secretary agree that it is very unfair that King's Lynn should already have spent £2,000 on a survey for the preservation of this ancient centre? Does he not agree that since the benefits of this new survey will be available to the whole nation there is no reason in the world why the local authority should bear any of this cost?

Mr. MacColl: The present survey will go much beyond the previous survey to


which my hon. Friend has referred. King's Lynn will benefit from the great amount of information which will be collected on the comprehensive preservation of ancient towns.

Housing Loans

Mr. Rossi: asked the Minister of Housing and Local Government what proposals he has for increasing the level of loan sanctions for local authority mortgages over the next six months.

Mr. Greenwood: I have this matter under review in the light of other factors affecting the housing market.

Mr. Rossi: Is the right hon. Gentleman aware that, whereas in the first half of 1965 £95 million was given to local authorities for the purpose. in the first half of this year under £32 million was given?

Hon. Members: Reading.

Mr. Rossi: Does he not think that the £75 million being given to the Land Commission to acquire private property would be better spent in enabling ordinary men and women——

Hon. Members: Reading.

Mr. Rossi: —to become the proud owners of their homes?

Hon. Members: Hear, hear.

Mr. Greenwood: I congratulate the hon. Gentleman on his ovation. This is part of a much bigger picture and we can view it only in the light of the amounts available to other lending institutions. We have the matter constantly under review.

Oral Answers to Questions — HOUSING

Rent Assessments

Mrs. Lena Jeger: asked the Minister of Housing and Local Government in how many cases, where rent assessment committees have increased the rent proposed by rent officers, such increases have been back-dated; and whether he is aware of the hardship caused to many tenants in these circumstances.

Mr. MacColl: Whether and when a rent increase can become effective in any case depends on the status and terms of the tenancy. Up to 7th October, the

original rent was increased in only 24 of the 259 cases determined by the London Rent Panel, and I have no evidence of hardship due to arrears in such cases.

Mrs. Jeger: Is my hon. Friend not aware that in some cases there is such a long delay between the rent officer's original decision and the hearing of the appeal that in the meanwhile repairs have sometimes been carried out and the unfortunate tenant has to pay rent backdated to the original application when he was not enjoying the amenities on which the new level was assessed?

Mr. MacColl: I would agree that in a case of that sort I would think that the increase should go back only to when the repairs were done.

Mr. Graham Page: Is the hon. Gentleman aware that in many cases where there is failure to back-date there is very grave hardship for the small landlord?

Mr. MacColl: The object of the Act is to hold the balance evenly, which is why it is sometimes criticised by hon. Members on both sides of the House.

Mortgage Option Scheme

Mr. A. Royle: asked the Minister of Housing and Local Government when his new mortgage option scheme will go ahead.

Mr. Murton: asked the Minister of Housing and Local Government whether he will now make a further statement on his discussions with representatives of the Building Societies Association regarding the mortgage option scheme.

Mr. Arthur Jones: asked the Minister of Housing and Local Government what is the reason for the delay in introducing the legislation to implement the mortgage option scheme which was first announced to Parliament on 1st March, 1966.

Mr. Allason: asked the Minister of Housing and Local Government when he proposes to introduce legislation to implement the mortgage option scheme.

Mr. Greenwood: The building societies saw difficulties in the administration of the scheme originally announced in March, but in subsequent discussions with


them and other mortgage agencies we have now evolved arrangements which will be easier for them to administer. I expect to introduce the necessary legislation in the near future.

Mr. Royle: Can the Minister tell the House why there has been this long delay since the original announcement on 1st March? The country is very shocked that yet another Government pledge has been broken. Will the right hon. Gentleman also explain how, when this new scheme comes forward, the building societies can possibly work it if even at the present rate of interest they are without funds?

Mr. Greenwood: As to the second point of the hon. Member's supplementary question, perhaps we had better wait for the report of the National Board for Prices and Incomes on building societies. I do not think that there has been any unreasonable delay. The original proposals were extremely complicated and would have involved building societies in a great deal of work they felt unable to contemplate, During the months that have elapsed we have evolved a much simpler and, I think, more satisfactory system.

Mr. Murton: Does not this lay the Government open again to the same charge of too little and too late?

Mr. Greenwood: I do not think that there is any charge that the hon. Member would hesitate to make against the Government, but when he sees the Bill he will find that he is quite wrong.

Mr. Jones: Is the Minister aware of the uncertainty created in the house market generally by the substantial delay in the implementation of the Government's promise? Does he intend to do anything to reassure the building industry, and particularly the smaller house builders?

Mr. Greenwood: This has, perhaps, been one of the factors—there have been a number of factors—producing uncertainty, but we are in constant contact with the building industry, the building societies and local authorities, and I hope that any uncertainty will be allayed.

Mr. Allason: Is not this a very great change from the so-called scheme outlined by the Chancellor of the Exchequer on

1st March, in which he indicated just quick discussions with the building societies followed by a simple scheme, the second phase of which would come into operation early next year? Is not this a gigantic confidence trick?

Mr. Greenwood: This is a much simpler scheme, and I think that the hon. Gentleman will welcome it when the Bill finally appears, accompanied by a White Paper.

Mr. Frank Allaun: Is my right hon. Friend aware that many of us on this side hope that the Bill will make this considerable reduction in interest rates apply to those with existing mortgages; and that, in that case, all the criticisms from hon. Gentlemen opposite will fall to the ground?

Mr. Greenwood: Yes, Sir. I am fully aware of that.

Mr. Rippon: Can the right hon. Gentleman say whether this legislation will be introduced before Christmas, and whether it will help with the deposit, which is one of the greatest difficulties for people at present?

Mr. Greenwood: I very much hope that the Bill will be introduced well before Christmas. As to the details, I think that the right hon. and learned Gentleman had better wait until the Bill is published.

Condensation and Dampness

Mr. Dalyell: asked the Minister of Housing and Local Government what recent consultation he has had with local authorities about condensation and dampness in recently-completed houses.

Mr. Mellish: None, except the day-today contacts of the Department's officers, but my right hon. Friend and his right hon. Friends the Secretary of State for Scotland and the Minister of Public Building and Works are preparing a publicity campaign to help and advise householders as well as the building trade on how to avoid these troubles.

Mr. Dalyell: In co-operation with the Secretary of State and the Minister of Public Building and Works, can we have a vigorous national campaign to combat the evils of condensation and dampness, which cause misery in new houses?

Mr. Mellish: We will do all we possibly can. Regional conferences will be starting early in the new year, the first one being in Manchester. Before then, leaflets will be made available to householders and tenants by local authority distribution. We will do all we can.

Disabled Persons (Special Needs)

Dr. David Owen: asked the Minister of Housing and Local Government if he will seek to amend the Rating and Valuation Act of 1925 so as to allow exemption from rates for any change in amenities designed to alleviate a physical disability of the householder or his dependants.

Mr. Evelyn King: asked the Minister of Housing and Local Government if he will seek power to provide that, where the occupier of a house becomes paralysed or loses the use of his legs and has on that account to instal a lift or garage for a disabled person's car, or other essential apparatus, the property shall not be charged additional rates so long as it is occupied by the disabled person.

Mr. MacColl: Alterations to a house can only attract additional rates if they add to its letting value. In addition, the law already requires valuation officers to disregard the value of garages and other structures which cater for the special needs of the disabled. My right hon. Friend is not aware that anything further is needed.

Dr. Owen: Is my hon. Friend aware that disabled people who install downstairs lavatories or bathrooms—vital necessities—have to answer for it by paying extra rates? Surely, this is an anomaly which, like that of garages, needs to be corrected?

Mr. MacColl: The difficulty is that that is a conversion within the premises, which is more difficult to single out than is an extra structure, though in cases of difficulty it has always been possible to apply to the valuation officer for exemption.

Mr. King: Is the Minister aware that reports of a number of cases in the last few weeks do not bear out what he says? Will he look into those cases? Is it not a fact that it is the duty of any civilised community not further to penalise those who are disabled already, who bear such a burden but who seek to be self-reliant?

Mr. MacColl: I know of only one case that has attracted some publicity, and I understand that there the valuation officer has revisited the premises and is reconsidering a possible change of valuation. On the whole, our experience has been that there are not many cases, but if the hon. Gentleman has any case to which he wishes to draw my attention, I shall, of course, be very pleased to look into it.

Mrs. Knight: Does not my hon. Friend recognise that any conversion makes a house more valuable for letting purposes, so that the Answer he gave a few moments ago was slightly misleading?

Mr. MacColl: The Answer expressed the position as it is, which is that things like a ramp or wider doors may reduce rateable value.

Improvements

Mr. Frank Allaun: asked the Minister of Housing and Local Government, if he will seek to accelerate the improvement of old houses by the installing of baths, inside water closets and hot water systems, by removing some of the many steps in the procedure which local authorities have at present to follow before proceeding with improvement area schemes.

Mr. Mellish: My right hon. Friend is anxious to see more improvement done, but the procedure could not be altered without legislation.

Mr. Allaun: Does it not call for legislation? Does the Parliamentary Secretary agree that it is unnecessary and delaying that up to seven visits to each house are required under the present procedure of the 1964 Act, and up to 24 individual notices? Surely that is too much?

Mr. Mellish: This legislation has not been on the Statute Book for long and we are anxious that it should be given a fair trial and a good run. Many authorities which have accepted the arrangements are doing a first-class job. I wish some authorities which spend all their time criticising would get on and do the job. We shall need to amend the law, but not yet.

Mr. Graham Page: Is the Parliamentary Secretary aware that in many cases the standard grant is quite insufficient to


provide improvement to a dwelling and that Socialist-controlled authorities are refusing to operate the discretionary grant although this would solve many of these problems?

Mr. Mellish: Of the number of those which applied the full value in the main has not been taken up. The greatest problem is lack of information as to what the public are entitled to have. One of the problems for the Ministry is to get this over to those who want to get the work done.

Mr. Michael Foot: Does not my hon. Friend think that there will be plenty of time for legislation in future, because obviously there are not going to be any more Motions of censure for another year or two?

New Towns (Houses for Owner-Occupiers)

Mr. Allason: asked the Minister of Housing and Local Government whether he will instruct the New Towns Commission to increase the proportion of houses provided for owner-occupiers.

Mr. Mellish: The Commission is already doing so and my right hon. Friend sees no need for any such instruction.

Mr. Allason: Is the Parliamentary Secretary aware that the Commission for new towns did not seem to have heard of his welcome intention of increasing the proportion of owner-occupiers? Does it include the sale to tenants of their existing new town houses? Would he instruct the New Towns Commission to get moving on this, because its present policy is that of go very slow indeed?

Mr. Mellish: I do not know what the hon. Member is complaining about. Our record since we have been in office, both in regard to development corporations and new towns in selling houses, has been much better than that of the previous Government. In the hon. Member's constituency of Hemel Hempstead at Grove Hill, we shall sell at least 100 houses which are to be put up for sale.

Mr. Speaker: Mr. Hamilton.

Mr. Allason: I have a letter here——

Mr. Speaker: Order. The hon. Member has no special privilege in this House. Mr. Hamilton.

Later—

Mr. Speaker: I wish to apologise to the hon. Member for Hemel Hempstead (Mr. Allason). I realise now that when I called Mr. Hamilton he may have thought that I said Mr. Allason.

Building Programme

Mr. William Hamilton: asked the Minister of Housing and Local Government what plans he has for speeding up the house building programme as an essential part of the policy of redeployment of labour.

Mr. Mellish: We are pressing on with the housing programme as fast as economic circumstances permit. In particular, the public sector contribution is steadily rising, and the authorities in the principal industrial towns have been given three-year programmes limited only by their capacity to build.

Mr. Hamilton: Is my hon. Friend satisfied that the financial arrangements which the present Government have introduced will have the required effect in this matter? Could he say whether he is satisfied with the rate of acceleration of the provision of industrialised buildings, since the important matter here is getting on with the job as quickly as possible?

Mr. Mellish: My hon. Friend will be glad to know that, in our Housing Subsidies Bill which we shall be introducing soon, we shall provide a special subsidy of £30 a year on top of the ordinary subsidy for houses built as part of a plan for providing houses for industry. He will see that we shall take advantage of all methods of speeding up house-building. On that matter, we also come out pretty well.

Mr. Rippon: Is the Parliamentary Secretary aware that while the public sector may be holding its own, the private sector is steadily falling? What does he propose to do about that? Does he agree that now there is very little chance of building 400,000 houses even by 1967?

Mr. Mellish: The right hon. and learned Gentleman is very impatient.


There is a Question which will be answered in a moment or two which is addressed to my right hon. Friend on that matter.

Mr. Murton: asked the Minister of Housing and Local Government how many permanent dwellings will be completed in Great Britain in 1966.

Mr. Scott: asked the Minister of Housing and Local Government what estimate he has made of the number of permanent dwellings likely to be completed in Great Britain in 1966.

Mrs. Renée Short: asked the Minister of Housing and Local Government how many dwellings are now likely to be completed in 1966.

Mr. Channon: asked the Minister of Housing and Local Government what estimate he has made of the likelihood of reaching the target of 400,000 houses to be completed in 1966 announced by his predecessor on 1st March, 1966.

Mr. Greenwood: In present economic circumstances prediction is difficult, but I anticipate that the total of completions in 1966 will be approximately the same as in 1965, when a record 382,000 homes were completed.

Mr. Murton: Surely the predecessor of the right hon. Gentleman, now the Lord President of the Council, promised that the Government would reach the target of 400,000 houses this year. Now the right hon. Gentleman has denied it for the second time. Will he also admit that this is a gross failure by the Government?

Mr. Greenwood: No. Indeed, if the hon. Member counts that a gross failure, I do not know how he accounts for the record of his own Government, who never reached the figure which we reached last year and will reach this year.

Mr. Rippon: Will the right hon. Gentleman answer the Question which I put to the Parliamentary Secretary and say what the Government are doing about the serious fall in private house-building? Will he agree that there is very little prospect of building 400,000 houses next year?

Mr. Greenwood: The measures of July inevitably had some effect, but this year we shall be completing about 200,000 in the private sector and 180,000 in the

public sector. The right hon. and learned Gentleman will have read with interest today the statement by the Governor of the Bank of England saying that temporary bridging finance will be made available for house purchase. This is one of the measures which I hope will restore confidence in the building industry.

Mrs. Short: Will my right hon. Friend now consider the proposal which his predecessor was not prepared to consider for setting up a national housing authority to release finance to a national housing corporation which could build in any part of the country where the local authority or private enterprise is not willing to do so?

Mr. Greenwood: I would consider any suggestion my hon. Friend made, but I could not at this moment pledge myself to accept the suggestion and make a specific pledge about it.

Mr. Channon: Would not the right hon. Gentleman agree that, in view of the very clear assurance given to this House by his predecessor that 400,000 houses will be built this year, the Government's total this year is one which is very disappointing to hon. Members on both sides of the House? Will he today give his forecast—and let it be an accurate forecast—of what he thinks will be built next year?

Mr. Greenwood: I think everyone is disappointed that 400,000 houses probably will not be built this year, but the public as a whole is gratified to know that we shall be on just about the same level as last year.

Mr. McNamara: Does my right hon. Friend agree that, now we have had the Third Reading of the Land Commission Bill, there is a possibility of getting these houses built?

Mr. Rossi: asked the Minister of Housing and Local Government how many houses were started in the first six months of 1966; and what was the comparative figure for 1965 and for 1964.

Mr. Mellish: I would refer the hon. Member to the appropriate tables in the Monthly Digest of Statistics and in the published Housing Statistics.

Mr. Rossi: Is not the Joint Parliamentary Secretary aware that the figures in


those statistics reveal the fact that, if the rate of deceleration in starts, namely, twice fewer houses being started than in the year before, is maintained, half of those being public authority houses, by 1970, instead of reaching 500,000 houses a year, we shall reach nine—I beg the House's pardon.

Hon. Members: Hear, hear.

Mr. Rossi: Nine—period—or nil—in other words, the housing programme will have ground to a standstill.

Mr. Mellish: The hon. Gentleman must not be pessimistic. Figures for starts tell only part of the story. Completions rose to a record level in 1965, and so far this year a similar level has been maintained. Moreover—I should think the hon. Gentleman would be glad of this—public sector completions are over 4 per cent. higher this year than they were last and 12 per cent. higher than they were in 1964.

Camden (Rents)

Mr. Boyd-Carpenter: asked the Minister of Housing and Local Government whether he has studied the report by the district auditor on the accounts of the London Borough of Camden, which discloses that in respect of local authority dwellings the amount paid by the ratepayers by way of subsidy in 1966–67 will exceed the amount of rent paid by tenants; and whether, in view of the fact that the Camden Borough Council have failed to discharge their duty under Section 111 of the Housing Act, 1957, to impose reasonable charges for the tenancy, he will set up a local inquiry under Section 173 of that Act.

Mr. MacColl: No, Sir. The district auditor's report does not allege any failure of duty. It refers to an urgent need for the council to review the housing revenue financial position. My right hon. Friend knows the council has had these matters under consideration and he has no reason to suppose that this advice will not be acted on.

Mr. Boyd-Carpenter: Is not this a situation which has been developing for the last 18 months? Is the Parliamentary Secretary prepared to connive at a position in which the ratepayers of this borough will be forced to find something

like half the rents of their colleagues who have the good fortune to be council tenants? Is it not necessary for a Minister of Housing and Local Government to take action?

Mr. MacColl: I think the position has been arising for much longer than 18 months. The trouble arose from the fact that the new council inherited a very difficult position from the three boroughs of which it is constituted. It is tackling the problem. It has had a survey and is developing a rents policy. I have no reason to suppose that it will not get on with its statutory duty.

Circular 50/65

Mr. Peter Mills: asked the Minister of Housing and Local Government, whether he will now withdraw Ministry of Housing Circular 50/65.

Mr. Chichester-Clark: asked the Minister of Housing and Local Government whether he will now withdraw Circular 50/65.

Mr. Mellish: No, Sir.

Mr. Mills: Surely this Circular is monstrously unfair and will undermine the confidence of many builders? Will the hon. Gentleman take steps to ensure that where a local authority employs direct labour, one out of three contracts shall be given to competitive tender?

Mr. Mellish: Let us get the question in the right proportion. Ninety-one per cent. of all that is built for public authorities is built by private enterprise. Only 9 per cent. is built by direct labour. The circular which we sent out advised local authorities to put schemes out for competition if they felt any doubt about their cost. They were also warned in the circular that we, as a Ministry, would thoroughly check the estimates they put in. We are quite satisfied that we shall not withdraw the circular.

Mr. Chichester-Clark: Is the Minister aware of the growing anxiety about the activities of the Salford direct labour department, and can we be sure the House will be given all the facts, including the highly critical report of the district auditor?

Mr. Mellish: The hon. Member should have put that Question down if he has things to say about Salford. He should


have asked a separate Question about this, and I have no doubt that there are other people in the House qualified to speak on this question.

Mr. Heffer: Is it not true to say that this particular circular in fact puts local authority direct building departments on precisely the same level as those of private enterprise, and therefore this is much fairer than it was in the past?

Mr. Mellish: The one-in-three rule which prevailed until we issued this circular prevented continuity of work in the direct labour departments. Continuity makes for efficiency, particularly now that we are in the field of industrialised building. I do not know why there is so much prejudice on the part of hon. Members against direct labour departments. I should have thought that people would want to wish them well.

Command Paper No. 2838

Mr. Peter Mills: asked the Minister of Housing and Local Government whether he will now issue a revised edition of Command Paper No. 2838.

Mr. Greenwood: No, Sir.

Mr. Mills: In view of the dismal record of the Government in house building, in spite of what they say, is the figure of half a million by 1970 still feasible? Surely it is time for some revision?

Mr. Greenwood: The figure is not a dismal one, and the broad objectives and general policy contained in the White Paper have not changed.

Housing Returns

Mr. Scott: asked the Minister of Housing and Local Government whether he will now make a further statement on the housing returns.

Mr. Greenwood: I am considering whether changes should be made in the present form of the housing returns now that so much more housing information is regularly published in Housing Statistics.

Mr. Scott: Would the Minister agree that the reason we have had no housing return recently is that it would reflect the poor state of affairs? Is the responsibility for this to be laid at the door of

the Chancellor of the Exchequer or the right hon. Gentleman's predecessor?

Mr. Greenwood: There is a monthly housing return and a brief monthly summary of construction. There is a full quarterly statement and a quarterly Appendix. Also Housing Statistics are prepared for quarterly publication. I do not think there is any lack of information on this very important subject.

Mr. Lubbock: Is the Minister aware that I wrote to his predecessor asking if statistics on industrialised buildings could be included in the quarterly housing return and that he promised this would be considered favourably? Yet no action has been taken.

Mr. Greenwood: I did not know about that. I will look into what the hon. Gentleman has suggested and, if it is practicable, I will see that it is done.

Multi-occupied Furnished Lettings

Mr. Winnick: asked the Minister of Housing and Local Government whether he will introduce legislation to include multi-occupied furnished lettings in the same way as unfurnished lettings within the framework of the Rent Act, 1965.

Mr. MacColl: No, Sir. Furnished lettings in multi-occupied properties enjoy the same rights to rent fixing and security of tenure under the Furnished Houses (Rent Control) Act, 1946, as other furnished lettings. The machinery of this Act seems to me better adapted to the special features of furnished lettings than that of the Rent Act, 1965.

Mr. Winnick: Is my hon. Friend aware that a number of unscrupulous property companies and private landlords put in tatty bits of furniture in order to avoid tenants having full security for unfurnished premises under the Rent Act, 1965? Would he not agree that multi-occupied furnished premises are quite different from furnished premises?

Mr. MacColl: The hon. Gentleman was good enough to write to me about a particular case into which I am looking and will reply. On the more general part of the question, it is for the rent officer to decide in the first place whether the furniture is merely a few scraps to get out of the Act.

Mr. Lipton: Is it necessary for the Government to have two lots of tribunals, one dealing with furnished lettings and the other with unfurnished lettings? Cannot we have one machinery to deal with rents, whether the premises are furnished or unfurnished?

Mr. MacColl: As the hon. Member knows, we have taken the first steps towards having a common panel for the two different types of tribunals, but at the moment it is not opportune completely to fuse the two.

Mrs. Knight: Does not the Minister recognise that since the Land Commission Bill robs tenants of a great many of the rights to which they were entitled under the Rent Act, 1965, it would be ludicrous to extend those paper privileges at this time?

Mr. MacColl: If I thought there was any likelihood of a General Election soon, I would like to see the judgment of the tenants in the ballot box as to which was best for them, the Land Commission Bill or the Rent Act.

Industrialised Building

Mr. Ronald Atkins: asked the Minister of Housing and Local Government what was the proportion of industrialised to traditional building in the housing output in the past 10 years.

Mr. Mellish: As the Answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Atkins: Is the Minister satisfied that progress has been sufficient for us to reach our industrialised building target of 40 per cent. by 1970?

Mr. Mellish: Yes. We can only talk here of the public sector. I am very glad to say that the figures have been steadily rising. In the eight months of this year, it has gone up in the public sector by 25·7 per cent. I expect by the end of the year that figure will have reached 30 per cent. I cannot give any figures for the private sector.

Mr. Ronald Bell: Will the Minister not be mesmerised by the words "industrialised" and "traditional"? Is there not a grave risk that in our anxiety to house people we shall cover the countryside with unattractive dwellings?

Mr. Mellish: The hon. Gentleman must clearly understand that there has been a great deal of trial and error already in this field, and much industrialised building today is not only good but is better in many instances than some of the traditional forms of building.

Following are the figures:


INDUSTRIALISED HOUSE-BUILDING FOR THE PUBLIC SECTOR—ENGLAND AND WALES. NUMBERS AND PROPORTIONS OF ALL COMPLETIONS



Proportion per cent.
Number


1956
20
29,000


1957
(20)
(29,000)


1958
(18)
(21,000)


1959
(17)
(17,000)


1960
(15)
(15,000)


1961
(15)
(14,000)


1962
(15)
(15,000)


1963
(15)
(14,000)


1964
14·4
17,000


1965
18·9
25,000


1966, January to August
25·7
23,000



Estimates ( ).

Notes:

(a) The figures for 1956 relate to "new tradition" housing. The definition does not precisely correspond with that for "industrialised building", but the effect of the difference is thought to be small.

(b) Information was not collected between 1956 and 1964. The figures for these years are very rough estimates.

Mr. Ronald Atkins: asked the Minister of Housing and Local Government how the unit costs of industrialised and traditional building compare; and what are the relative times in man-years per house for industrialised and traditional building.

Mr. Mellish: No simple comparison of unit costs is very useful because averages conceal great diversity according to the systems used, the type of site, the size of contract and other factors. Comprehensive details of man-years per house are not available. However, it is known that with some systems the saving of site labour is substantial and with others only marginal.

Mr. Atkins: Is the Minister satisfied that unit costs are low enough to attract more contracts and programmes from local authorities?

Mr. Mellish: The figures we have at the moment show that on high rise, two to four-storeys, housing and in flats five or more storeys, in the main it is cheaper by


industrialised methods. One of the problems is on the low rise. The difficulty is that there are not enough sites to give a continuous run, which makes this more economic. That is a problem for the industry.

Mr. Molloy: Would my right hon. Friend consider taking steps to increase the flow of technical and related information regarding industrial building between his Department and local authorities?

Mr. Mellish: A great deal of work has already been done on this. The National Building Agency is responsible for the appraisal certificates for industrialised building, particularly on low rise, and I think that any information which any local authority requires is in fact available, and what is more important, they are aware of it.

Improvement Grants

Mr. Arthur Jones: asked the Minister of Housing and Local Government when he proposes to introduce the foreshadowed legislation to amend the improvement grants procedure set out in the Housing Acts, 1961 and 1964.

Mr. Costain: asked the Minister of Housing and Local Government when his Departmental inquiries into the level of standard and discretionary improvement grants will be completed.

Mr. Mellish: My right hon. Friend cannot yet say when these inquiries will be completed or legislation would be introduced.

Mr. Jones: I thank the Joint Parliamentary Secretary for that reply. What emphasis are schemes of conversion and improvement given in his Ministry's housing policy? To what extent is he prepared to make further funds available to local authorities for schemes of area improvement?

Mr. Mellish: My right hon. Friend has in fact given me personal responsibility for encouraging local authorities to do more of this work. That I have been trying to do. As was said earlier today, one problem arises from the lack of knowledge, not only on the part of citizens, but on the part of local authorities. We are trying very hard to get a propaganda drive going to make the facts known to the people.

Rent Rebate Schemes

Mr. Costain: asked the Minister of Housing and Local Government whether he will now make a statement on his consultations with the local authority associations, which have been in progress for some time, about the rent structure of local authorities.

Mr. Greenwood: Formal consultations with the local authority associations on rent rebate schemes will start shortly in connection with the proposed new legislation on housing subsidies.

Mr. Costain: Is not the Minister aware that 12 months ago, in November, 1965, paragraph 41 of The Housing Programme 1965 to 1970 White Paper said that both on tenancy and rent policies there would be consultations with local authorities? Is he telling the House that this has been delayed for 12 months?

Mr. Greenwood: It has been delayed because it was connected with the Bill which was introduced before the General Election and which then lapsed. That Bill will now be reintroduced in the near future and the discussions will take place in the light of the Bill we shall introduce. Our policy remains exactly the same as that set out in paragraph 41 of the White Paper.

Mr. Winnick: On the subject of rent structure, would not my right hon. Friend agree that it would be most unfair for council rents to be raised during the present freeze on incomes?

Mr. Greenwood: We appealed to councils not to increase their rents during the current six months. Only 14 out of 1,200 housing authorities raised their rents.

Mr. Rippon: Does the Minister agree that on the same assumption it would be wrong to raise rates?

Hon. Members: Answer.

National House Builders' Registration Council

Mr. Loveys: asked the Minister of Housing and Local Government whether he will make a statement concerning the development of the National House Builders' Registration Council; and


whether he is satisfied that this council is able to give sufficient protection to house purchasers.

Mr. Mellish: The Government believe that the scheme can provide the most satisfactory means of protecting purchasers of new houses. To be fully effective, however, its coverage needs to be practically universal. The number of registered builders has increased since March from 2,700 to over 4,500 and the scheme is estimated to cover over 60 per cent. of new private houses.

Mr. Loveys: May I thank the Parliamentary Secretary for that reply and ask him Question No. 34?

Mr. Speaker: Order. There is now no time for Question No. 34. Questions to the Prime Minister.

Oral Answers to Questions — MINISTER OF STATE, FOREIGN OFFICE

Mr. Eldon Griffiths: asked the Prime Minister if he will appoint an additional Minister of State at the Foreign Office.

The Prime Minister (Mr. Harold Wilson): No, Sir.

Mr. Griffiths: The Prime Minister will be aware that the E.F.T.A. nations want us to join the Common Market, that the Commonwealth and farming difficulties can be overcome, and that there is a large majority in the House of Commons in favour of this country's joining Europe. Will he therefore appoint a Minister Plenipotentiary with specific instructions to seek British entry into the Common Market on the basis of the Treaty of Rome as soon as possible?

The Prime Minister: If the hon. Gentleman is referring purely to an appointment, which is what the Question is about, as he will know, my right hon. Friend the Chancellor of the Duchy of Lancaster has a very clear commission in this field and he is responsible on the political side for all the probings, inquiries and discussions with all the countries concerned about the terms on which our entry to the Common Market could be made.

Oral Answers to Questions — COMMONWEALTH COUNTRIES (CONTRACTS)

Mr. Bruce-Gardyne: asked the Prime Minister what progress he has made, in consultation with other Commonwealth Prime Ministers, regarding his proposal for a specific preference in awarding contracts to Great Britain from the Commonwealth; and when he now proposes to introduce such a scheme.

The Prime Minister: Commonwealth Trade Ministers, at their meeting in June this year, agreed to consider the extent to which their Governments in their public purchases might place orders in other Commonwealth countries where commercial and other considerations made this practicable.

Mr. Bruce-Gardyne: Would the Prime Minister agree that this is a very far cry from his original proposal? Was this idea discussed at the Commonwealth Prime Minister's conference? What steps has he taken to obtain preferential treatment of tenders from British firms for contracts in Commonwealth countries, which was his original idea?

The Prime Minister: Yes; this matter was discussed again at this year's meeting and the Commonwealth Trade Ministers have now agreed to give special consideration to other Commonwealth products, as I have said, where they meet commercial specifications and are otherwise what is required. We have also done something which I think was long overdue: we have reconstituted the Commonwealth Special Committee on Aviation which was ended in, I think, 1956, so that Commonwealth countries placing aviation orders can know what other Commonwealth countries, particularly ourselves, have available.

Oral Answers to Questions — FAR EAST (PRIME MINISTER'S VISIT)

Mr. Dalyell: asked the Prime Minister when he now expects to visit the Far East.

The Prime Minister: I have, as yet, nothing to add to the Answer I gave on 25th October [Vol. 734, c. 158] to a Question by my hon. Friend the Member for Yarmouth (Dr. Gray).

Mr. Dalyell: In making preparations for an Asian visit, would my right hon. Friend give consideration to the possibilities of linking British aid to developing countries with under-used resources in this country, such for instance as the capacity at Bathgate where there is 9 per cent. unemployment?

The Prime Minister: That is a bit remote from the visit. As my hon. Friend knows, I had to decline, with regret, because of the possibility of an early recall of the House, an invitation to visit India. On the question my hon. Friend raises, this is very much our policy so far as possible. Indeed, as soon as the Bathgate position became clear, I asked whether in the aid we are giving to Zambia in the matter of trucks we could use Bathgate's capacity. Unfortunately, Bathgate did not produce the kind of trucks needed in Zambia.

Sir Alec Douglas-Home: While aid is a question of the greatest importance, would the Prime Minister agree that there are now opportunities for British diplomacy and leadership which are opening up in the Far East, particularly in the context of the S.E.A.T.O. Alliance, which might enable our country to make specific proposals to give this a slant towards Asian collective security for Asians? Are any diplomatic initiatives being taken in this direction?

The Prime Minister: On the all-important question affecting Asia, namely, the question of Vietnam, the right hon. Gentleman will have seen, and I hope endorsed, the initiative taken by my right hon. Friend the Foreign Secretary. This week my right hon. Friend is entertaining, and I have seen and will be seeing again, the Japanese Foreign Minister for a discussion of all these points.

Oral Answers to Questions — PRODUCTIVITY CONFERENCES

Mr. William Hamilton: asked the Prime Minister what plans he has for more national or regional conferences on productivity, in view of the success of the one held a short while ago; and whether he will consider placing in the Library an abbreviated version of the proceedings of such conferences.

The Prime Minister: The National Economic Development Council are re-

viewing progress and will be advising me about reconvening next year the Conference which was held in September. A short paper on the proceedings of the Conference is now being prepared and I will arrange for a copy to be placed in the Library.

Mr. Hamilton: In view of the undoubted success of the first conference in September, will my right hon. Friend reconsider his decision to make this an annual event? Will he seek to have them more often and perhaps have some on a regional basis rather than having them all centred on London? Further, will he take steps to see that a much more extensive resumé of what took place in September is placed in the Library, so that hon. Members may have access to information which is vital to us all?

The Prime Minister: There was a general view at the conference that it should be reconvened in three or four months, early next year, and that N.E.D.C. should be given the task of preparing the arrangements for this. It has also been asked to consider what follow-up action is required both with individual industries and on a regional basis, possibly even going to a sub-regional basis, to individual towns and cities. On the question of the dissemination of material, as my hon. Friend knows, we published all the texts of the very valuable papers which were prepared by N.E.D.C. for this conference.

Sir G. Nabarro: Rather than proliferate the national productivity councils when will the Prime Minister get down to grass roots and do something to prevent the further wilting and sagging of the "Little Neddies" which are sinking into the morass of bureaucratic detail?

The Prime Minister: I cannot compete with the hon. Gentleman in the words he uses. Everyone who attended the conference thought that it was an extremely valuable innovation, contrary to the hon. Gentleman's views, and that it provided a basis for follow-up action, particularly by the E.D.Cs., which will strengthen their powers and studies.

Mr. Heath: Is the Prime Minister aware that one of the greatest obstacles to increasing productivity in the future is the decline in private investment which is now taking place, and which will take


place even more rapidly, as is shown by the forecasts? As the Board of Trade Journal says in commenting on this, one of the major factors is loss of confidence. What does the Prime Minister propose to do to see that there is an increase once again in private investment?

The Prime Minister: The right hon. Gentleman will no doubt have seen the announcement by the Bank of England this morning, after consultation with my right hon. Friend the Chancellor, about the provision of more finance in respect of investment. My right hon. Friend the First Secretary will be discussing very thoroughly later this week the proposals of the C.B.I. following our productivity conference, when this matter was raised.

Oral Answers to Questions — HOUSE OF COMMONS (SPECIALIST COMMITTEES)

Mr. Hamling: asked the Prime Minister whether he will now seek to take powers for the establishment of specialist committees to deal with public business.

The Prime Minister: I have, as yet, nothing to add to the Answer I gave on 20th October to a Question by the hon. Member for Haltemprice (Mr. Wall) [Vol. 734, c. 394.]

Mr. Hamling: Is my right hon. Friend aware that if we had specialist committees to probe the activities of the Executive we might be spared the fiasco of last night's Motion of censure on the Opposition Front Bench?

The Prime Minister: I think that perhaps this is rather wide of the question. I was not sure that it would be the function of specialist committees to probe the function of the Opposition. On the serious point of the question, there have been discussions with the Opposition and the ball is now back in the Government's court and we hope after further discussions with the Opposition to make a full statement to the House this month.

Mr. Heath: Is the Prime Minister aware that more than six months ago, winding up the debate on the Address, I gave the Opposition's agreement to the establishment of a specialist committee on science and technology, but nothing

happened about it despite our full agreement specifically on that point?

The Prime Minister: I was aware of the right hon. Gentleman's point about the six months, and if I was not I would have seen it from the entertaining speech he made at Scarborough on Saturday when he repeated it. A considerable part of the time, not the whole of it, has been held up inevitably by delays on the part of the Opposition in considering some of our proposals. I think that there is very general agreement about the committee on science and technology and we could proceed with this now, but there are other proposals which we have made, and some highly important proposals by the Opposition, which it would be useful if we could agree on and put to the House this month.

Oral Answers to Questions — EUROPEAN ECONOMIC COMMUNITY

Mr. Hamling: asked the Prime Minister what recent discussions he has had with the heads of other states about the possibility of Great Britain joining the European Economic Community.

The Prime Minister: Apart from discussions which took place last year, I have recently exchanged views with the Danish Prime Minister.

Mr. Hamling: When my right hon. Friend has further discussions will he remember that not all the point of view in the House tends in one direction?

The Prime Minister: I thought that there was fairly general agreement in the House that most, if not all, of us would wish to join the European Economic Community if we can get terms that safeguard British and Commonwealth interests.

Lord Balniel: As the Common Market countries have now reached agreement on their agricultural policy based on a levy system to protect agriculture, does the Prime Minister still adhere to his views that a levy system is unacceptable to the British Government?

The Prime Minister: The noble Lord will be well aware of the consequences to this country of the particular level of these levies. Certainly we take the


position that our situation must be protected in regard to the cost of food, and its effects on our balance of payments, the cost of living, wages and the rest. Certainly this must be one of the questions to be discussed.

Mr. Heath: The Prime Minister has previously been quite specific about this when he said that as a member of the European Economic Community we must retain the absolute right to buy all raw materials and foodstuffs in the cheapest markets in the world. Is that still his position?

The Prime Minister: I said that we must continue to have the right to buy cheap Commonwealth food as we always have. [An HON. MEMBER: "Not Commonwealth."] It was strictly in the Commonwealth context. I would have hoped that the right hon. Gentleman would agree with that as our position, unless it is his position that he would go in unconditionally so far as British interests are concerned.

Minister, etc.
Places/Countries Visited
Dates of Visits
Actual or estimated costs





£

Foreign Secretary
U.S.A. and Canada
7th to 17th October
1,225


Chancellor of the Duchy of Lancaster.
Greece
10th to 15th September
149


Chancellor of the Duchy of Lancaster.
Paris
28th to 30th September
30


Chancellor of the Duchy of Lancaster.
Bonn
11th to 13th October
26


Minister of State for Foreign Affairs (Lord Chalfont).
Geneva
12th to 25th August
90


Minister of State for Foreign Affairs (Lord Chalfont).
Alpbreh, Nr. Salzburg
26th to 28th August
50


Minister of State for Foreign Affairs (Lord Chalfont).
Copenhagen
28th to 29th September
68


Minister of State for Foreign Affairs (Lord Chalfont).
New Delhi
6th to 11th October
491


Minister of State for Foreign Affairs (Mrs. White).
Berlin
15th to 16th September
61


Parliamentary Under-Secretary of State (Lord Walston)
Mexico City
15th to 21st October
373


Chancellor of the Exchequer
Canada and U.S.A.
17th to 30th September
no charge on public funds


Chancellor of the Exchequer
Bonn
13th October
68


Chief Secretary, Treasury
Rome, Accra, New Delhi, Singapore, Bangkok, Vientiane.
30th August to 22nd September
1,012


Commonwealth Secretary
Rhodesia
18th to 28th September
6,750*


Parliamentary Under-Secretary of State for Commonwealth Relations (Lord Beswick)
Canada
19th to 23rd September
525


Parliamentary Under-Secretary of State for Commonwealth Relations (Lord Beswick).
Malta.
16th to 19th August
100


Secretary of State for Defence
Rome
22nd to 24th September
120


Minister of Defence for the Royal Navy
Singapore and Hong Kong
26th September to 7th October
705

Oral Answers to Questions — MINISTERS AND OFFICIALS (OVERSEAS VISITS)

Mr. Arthur Lewis: asked the Prime Minister what were the actual or estimated cost of the 43 visits to the 31 countries by 27 Ministers and officials carried out during the Summer Recess; and whether, in giving his personal permission for these visits, he considered the question of duplication of visits.

The Prime Minister: I will, with permission, circulate the Answer to the first part of my hon. Friend's Question in the OFFICIAL REPORT. The Answer to the second part is that I take all relevant considerations into account.

Mr. G. Campbell: May I ask a supplementary question on that?

Mr. Speaker: No.

Following is the Answer:

Minister, etc.
Places/Countries Visited
Dates of Visits
Actual or estimated costs





£


Minister of Defence for the Army.
Belgium, West Germany and Berlin
27th to 30th September
334


Minister of Defence for the Army.
Bonn
13th October
313


Parliamentary Under-Secretary of State for Defence for the Royal Air Force.
West Germany
26th to 28th September
468


Second Permanent Under-Secretary of State (Royal Navy).
Malta
8th to 14th September
44


Home Secretary
U.S.A.
17th September to 3rd October
3,559*


Permanent Under-Secretary of State, Home Office.
U.S.A.
17th September to 3rd October


Minister of State (Home Office) (Miss Bacon).
West Germany
4th to 8th September
46


President of the Board of Trade
Australia
16th September to 1st October
741


Minister of State, Board of Trade (Mr. Mason).
Brussels and Bretigny (near Paris)
8th September
46


Minister of State, Board of Trade (Mr. Mason).
Switzerland
12th to 14th September
89


Minister of State, Board of Trade (Mr. Mason).
Brazil and Venezuela
18th to 29th September
596


Minister of State, Board of Trade (Mr. Mason).
Holland
4th October
44


Minister of State, Board of Trade (Mr. Mason).
Italy
7th to 9th October
98


Minister of State, Board of Trade (Lord Brown).
Paris
4th October
19


Minister of State, Board of Trade (Lord Brown).
Bucharest
14th to 17th October
132


Minister of State, Board of Trade (Mr. Darling).
Paris
26th to 27th August
25


Minister of State, Board of Trade (Mr. Darling).
Czechoslovakia
12th to 16th September
76


Minister of State, Board of Trade (Mr. Darling).
Austria
16th to 18th September


Permanent Secretary, Ministry of Overseas Development.
Kenya
24th September to 6th October
420


Minister of Transport.
U.S.A.
10th to 22nd October
444


Secretary of State for the Colonies.
The Pacific Territories, Hong Kong and Australia
29th July to 3rd September
1,200


Parliamentary Under-Secretary of State for the Colonies.
Lesotho, Botswana, Swaziland and the Seychelles
26th September to 25th October
600


Minister of Social Security
Stockholm
11th to 13th October
102


Minister of Aviation
France
17th to 21st September
22


Minister of Public Building and Works
Far East
19th September to 3rd October
773


Attorney-General
Rhodesia
18th to 28th September
Included in cost of Commonwealth Secretary's party


* Includes Attorney-General's and officials' costs.

Oral Answers to Questions — NATIONAL PRODUCTIVITY CONFERENCE (PROPOSALS)

Mr. Park: asked the Prime Minister what action he is taking to secure the implementation of the proposals discussed at the National Productivity Conference.

Mr. Moonman: asked the Prime Minister what terms of reference he has given to the Working Party set up to

examine the proposals made at the recent National Productivity Conference which he chaired.

The Prime Minister: The proposals are now being considered either directly by the Government or by the working party set up under the chairmanship of the Director General of the National Economic Development Office. This working party, which has no formal terms of reference, is assisting the National


Economic Development Council in coordinating action arising from the Conference.

Mr. Park: Would my right hon. Friend agree that we shall not succeed in getting a sense of productivity-consciousness which is necessary until we have established pay and productivity committees at all levels of industry, and established at the factory floor? What action is he taking in consultation with trade unions and employers to bring this about?

The Prime Minister: My hon. Friend will know that my right hon. Friend the First Secretary is discussing with both sides of industry the question of the criteria for the second phase, the post-standstill phase, and has made clear that one of the most important questions to be satisfied in the criteria is on genuine pay and productivity agreements, that is, where the increase in pay is matched by a corresponding and simultaneous increase in productivity.

Mr. Moonman: While appreciating my right hon. Friend's Answer, would it not be sensible to instruct the working party set up as a result of the Productivity Conference to look particularly into the question of pay and productivity committees and the relationship with the existing collective bargaining structure?

The Prime Minister: There was considerable discussion on this point at the conference and it was decided to try to learn as far as we can from the experience on previous productivity agreements, some of which are extremely good and led to increased productivity, and some of which are complete "phonies" under which the pay is granted and nothing is done about productivity. But agreement was not reached on further pilot studies. This is being further examined.

Oral Answers to Questions — EUROPEAN COMMON MARKET

Mr. Palmer: asked the Prime Minister if he will now make a further statement on the Government's position in relation to British entry into the European Common Market.

Mr. Sandys: asked the Prime Minister what further steps he is taking to secure Great Britain's early entry into the European Economic Community;

and whether he will make a statement about the results of the exploratory talks on this subject between the British Government and the governments of the Community.

The Prime Minister: I have nothing at this stage to add to the speech made by my right hon. Friend the then Foreign Secretary in the foreign affairs debate on 11th July [Vol. 731, c. 996–1016.]

Mr. Palmer: Would not my right hon. Friend agree that a fairly early statement on the Government's intentions in relation to the Common Market would be of use to those in British industry who should be planning ahead for expansion when present troubles are overcome?

The Prime Minister: Yes, Sir. I certainly agree with my hon. Friend and that will be our intention. As the House will know, we are studying this matter very fully in very great depth and I hope that we shall be able to make a statement in the not-too-distant future.

Mr. Sandys: How much longer will the Prime Minister go on studying this question and having soundings on the Continent and Chequers weekends? Has not the Prime Minister ascertained by now what is negotiable and what is not, and can he not make a statement quite clearly on whether or not he intends to apply for membership of the Community?

The Prime Minister: The right hon. Gentleman will realise that we must be warned by his experience, that it is vital in this matter that we do not rush into a panic decision as happened in 1961, which was completely ill-considered and ill-thought-out, placing the right hon. Gentleman the Leader of the Opposition in the weakest possible position in his negotiations. Equally, we should be very careful to avoid treating the Commonwealth as the right hon. Gentleman did both on his tour of the Commonwealth and in his reprehensible handling of the Commonwealth Conference.

Mr. Woodburn: Is my right hon. Friend aware that this country would never forgive any Government who opened themselves to a rebuff such as was suffered by the Government in 1961 and that, before we enter the Common


Market, these matters must be quite clear? But will he in the meantime encourage industry to form as many attachments, engagements and arrangements as possible with the other countries?

The Prime Minister: Many of our industries have done so, and I think that the House will applaud the fine initiative taken by the C.B.I. in its visit to France last week and the successful discussions held between the C.B.I. and the Patronat. But I certainly feel, as my hon. Friend the Member for Bristol, Central (Mr. Palmer) suggested earlier, that in order that industry may make its plans it is important that we reach clarity about the position and about the likely terms which we could secure.

Mr. Grimond: The Prime Minister said earlier that there will be certain difficulties over the agricultural policy of the Common Market especially and in the strain which it might impose on our balance of payments. Since this policy has been well known for many months, what suggestion will the right hon. Gentleman make to the Common Market for the adjustment of this policy in a way which he considers might be satisfactory?

The Prime Minister: This is one of the central matters we have to inquire into, and when I am able to make a statement to the House I shall, obviously, deal with it. I prefer not to deal with it at this stage before I have a more general statement to make.

Sir Alec Douglas-Home: In the context of the Prime Minister's reply to my right hon. Friend the Member for Streatham (Mr. Sandys), does not the Prime Minister realise that, while there are very real problems to be settled in respect of New Zealand's requirements, there is not another Commonwealth country which does not realise now that membership of the Common Market by Britain would be of great advantage to all of them?

The Prime Minister: Very many Commonwealth countries see the advantage that could follow, but I do not think that they would take that argument so far as to say that we should just go into the Common Market asking them to pay

a levy of 65 per cent. on all the wheat we buy from Australia and Canada.

Mr. Shinwell: Is my right hon. Friend aware that those who are trying to push this country into the Common Market unconditionally are wasting their time and that it would be very many years before the British public would accept what the Opposition want, namely, to destroy the sovereignty of Great Britain?

Mr. Blaker: rose——

Hon. Members: Answer.

The Prime Minister: Frankly, I do not think that the real issue, as I said in the House when we first debated these matters in 1961, is the issue of sovereignty. We have voluntarily surrendered a great deal of sovereignty over many years, by membership of the United Nations, the International Court and many other bodies. This has been a progress towards civilisation in international relationships. As I said then, and I say again now, the question is: to whom does one surrender one's sovereignty, for what purpose, and on what conditions?

Mr. Blaker: Will the Prime Minister take this opportunity to put the record straight regarding a reply which he gave to my right hon. Friend the Leader of the Opposition on an earlier Question this afternoon? Is it not a fact that in his Bristol speech he said that we must be free to go on as we have for a hundred years, buying our food and raw materials in the cheapest markets, and that he did not refer to the Commonwealth?

The Prime Minister: I have not got the statement with me, but I shall be very glad to deal with that the next time we have Questions on it and I shall quote the exact words I used. Certainly, the context in which I spoke—I speak here from memory—related to the cheap food we import from the Commonwealth because it is from the Commonwealth that we import it.

Mr. Anderson: In order that the country may know the facts in this debate, will my right hon. Friend publish a White Paper on the implications for agriculture which he said earlier that he was considering?

The Prime Minister: When I am ready to make a statement we shall then have to consider what can be done in the way of publishing all relevant information; but it will be clear—this is relevant to what was asked by the right hon. Member for Streatham—that for us to publish information of this kind does not tell us what conditions certain other countries would wish to apply in relation to joining.

Sir G. de Freitas: Is my right hon. Friend aware that I bet £5 sterling against five French francs that within a year we should be negotiating for entry into the Six? In view of our balance of payments problem, will he do what he can to ensure that I win my five francs?

The Prime Minister: It is not for me to underwrite my hon. Friend's wagers, having just won five dollars from the Prime Minister of Canada on who would win the World Cup, thereby improving our balance of payments.

Oral Answers to Questions — QUESTIONS TO MINISTERS

Mr. G. Campbell: On a point of order, Mr. Speaker. May I respectfully ask for your guidance? If an hon. Member puts a Question, and does not ask a supplementary question, does that mean that there can be no other supplementary questions?

Mr. Speaker: It has been the custom for some time that, if the hon. Member who puts a Question does not ask a supplementary question, I move on to the next Question, unless there are special circumstances. I did not think that there were any today.

Mr. William Hamilton: On another point of order, Mr. Speaker. When Question No. 15 was answered today, it was answered with Question No. 65. You will recall, Sir, that the previous Speaker ruled that he would not take Questions beyond No. 50 which were tagged on to earlier Questions. May we know whether you are still adhering to that rule?

Mr. Speaker: If I remember aright—perhaps the hon. Gentleman will look it up—my predecessor did not make a categorical rule. Paraphrasing what he said, and giving the sense of it, he said that, if he felt that Members were putting down Questions late on the Order Paper, copy-

ing earlier Questions, he would be inclined not to call the later Questions and, if there were a batch of later Questions in the 50s, 60s, or 70s, he would be inclined not to call them.
I assure the hon. Gentleman that if I thought that there was any abuse I would not call late Questions.

ABERFAN DISASTER (TRIBUNAL)

The Prime Minister (Mr. Harold Wilson): With permission, Mr. Speaker, I wish to make a statement.

Mr. Lipton: On a point of order, Mr. Speaker. I seek to draw your attention, in the first instance, to the fact that the following Question appears on the Order Paper for Oral Answer by the Attorney-General tomorrow:
48. Mr. LIPTON: To ask the Attorney-General whether, in view of the representations by the Press Council, the National Union of Journalists, the Institute of Journalists, the Newspaper Society and the British Committee of the International Press Institute, he now will give further advice about public comment on the Aberfan disaster.
I have reason to believe that the statement about to be made by the Prime Minister will, in effect, answer the Question which I have put down for tomorrow 24 hours earlier than was originally intended.
May I ask you, Sir, whether your decision to allow the Prime Minister to make a statement, which will, in effect, answer the Question due to be dealt with tomorrow, breaches the principle of non-anticipation which it has always been the practice in the past to observe?

Mr. Speaker: I am not sure whether the hon. Gentleman wishes me to congratulate him on his prescience in foreseeing what may be going to happen. On the question of order, it is quite in order for the Prime Minister to make any statement which he wishes to make to the House.

The Prime Minister: Last Tuesday, this House resolved that a Tribunal be established under the Tribunals of Inquiry (Evidence) Act, 1921, to inquire into the causes of and all the circumstances relating to the Aberfan disaster. Last Thursday my right hon. and learned Friend the Attorney-General made a


statement on the implications of that decision. In view of the misunderstanding and, indeed, the gross misrepresentation of his action, I now find it necessary to ask permission to make a statement about some of the consequences of the decision the House took, and also about the position of the Attorney-General.
The House fully recognises the unique position of the Attorney-General. In addition to being a member of the Government, with collective responsibility for Government decisions, he has certain important duties in connection with the administration of justice which are non-political and on which no Prime Minister nor he himself would allow any pressures to be put. But he has a third capacity, that of adviser on matters of law to this House and through this House to the country. It was in this third capacity that my right hon. and learned Friend acted last Thursday.
It is now being widely suggested that my right hon. and learned Friend, in the statement he made last week, did what he did for political reasons, indeed, for party political reasons. This is a gross and contemptible slur on my right hon. and learned Friend which should be sharply repudiated by every Member of this House.
I think it right now that the House should be told of the considerations which led him to make the statement.
On Tuesday last this House resolved to establish the Tribunal and clothed it with all the powers of a judicial inquiry. Every Member of the House who agreed to that Motion must have known the consequences of that decision. They were set out, in fact, on a similar occasion by the then Prime Minister, Mr. Macmillan, when he referred to a 1921 Act Tribunal as
… a Tribunal armed with the power of subpoena, armed with the power to put witnesses on oath, armed with the power to pursue them for perjury if they tell untruths, armed with the power to examine and cross-examine, and where witnesses will be protected by privilege, irrespective of the evidence they give."—[OFFICIAL REPORT, 14th November, 1962; Vol. 667, c. 400.]
Since it is the earnest desire of every Member of this House, and of the whole public, including Press, television and radio, that this Tribunal must be enabled to get at the truth, and to establish responsibility where responsibility may

be shown to lie, it is vital that nothing be done which in any way weakens the power and ability of the Tribunal to do the job we have given it to do.
Before he made the statement my right hon. and learned Friend consulted the Chairman of the Tribunal and his statement was made with Lord Justice Edmund Davies' full knowledge and approval. And there was good reason for the statement. On the Friday of the disaster, and subsequently, the great majority of Press reporters, and also television and radio, did their duty with great responsibility and consideration—indeed, I myself, in Aberfan, paid tribute to the Press for the great responsibility and restraint it had shown. But, Sir, certain television interviews subsequently involved cross-examination of potential witnesses of a kind so searching that they appeared to be seeking to do the work of the Tribunal in advance without all the powers and safeguards for a judicial inquiry on which this House has insisted, as in the words I have just quoted from Mr. Macmillan.
Statements describing action taken or actions which it is considered should have been taken are matters to be elucidated by the Tribunal. Once statements have been elucidated by television interviewers under non-judicial procedures, they are on the record in a form which could hinder the Tribunal's ability to get at the truth.
Moreover, those who have attacked my right hon. and learned Friend and have imputed unworthy motives to him disregard the precedents he was following. In a previous Tribunal it was the Prime Minister, and not the Law Officer of the Crown responsible, who, in moving the Resolution to establish the Tribunal, said this:
… I do most sincerely and earnestly deprecate publication in any form or in any conditions, of any speculation as to what happened, now that a court has been set up to investigate the circumstances. It clearly will be impossible to obtain any indication of the real causes of this terrible disaster until the evidence has been given and considered by the Tribunal. I hope, therefore, whatever people may have thought or said in the past, that they will now say no more about it until the Tribunal reports."—[OFFICIAL REPORT, 12th June, 1939; Vol. 348, c. 938.]
That was the "Thetis" disaster.
Indeed, Mr. Speaker, the House itself has from the earliest days of these


Tribunals, ruled through the mouths of a number of your distinguished predecessors in the Chair that, having established a court with full judicial powers, this House itself could not discuss any matter within the competence of the Tribunal. The original rule, Mr. Speaker, was made on 21st March, 1921, by Mr. Speaker Lowther, when he ruled that as a matter before the Tribunal had been referred to that Tribunal it should not be raised or discussed in the House.
In 1959, for example, the then Lord Advocate refused to answer Questions to him even before the Motion had been confirmed by the House establishing a Tribunal, on the ground that a Motion was awaiting decision by the House.
In November, 1962, when the Vassall Tribunal was set up, your predecessor gave a Ruling which strictly followed that of Mr. Speaker Lowther.
The then Leader of the House, the right hon. Member for Enfield, West (Mr. Iain Macleod), then submitted a Motion to the House referring this whole matter to the Select Committee on Procedure, which reported on 5th March, 1963, confirming in the strongest terms the Rulings which your predecessors had given. The House approved that Report in July, 1963.
If Parliament has consistently and rigorously restrained its own functions in this matter because of the sub judice Ruling, my right hon. and learned Friend was abundantly justified in acting as he did so that others outside this House were advised of the legal position. The more so in view of the fact that since the House first ruled on these matters a new and much more formidable instrument of interrogation, namely, the television interview, has been evolved. In addition to this, it was the more necessary in that those whose duty it is to assist the Tribunal had already begun their work in Aberfan and were in process of collecting evidence and taking statements from witnesses who, therefore, by this time had become witnesses of the Tribunal.
I trust, therefore, that, having quoted the precedents and recorded the facts, the House as a whole will agree that my right hon. and learned Friend was fully justified in the action he took in the

discharge of his duty to the House and the country.

Mr. Heath: Is the Prime Minister aware that his statement raises many points to which right hon. and hon. Members and many people outside the House will wish to give further consideration?
Is the right hon. Gentleman further aware that what aroused the greatest criticism in the Attorney-General's statement—and the Attorney-General is not the legal adviser of the country—was that any comment—any comment—on these matters was highly undesirable and that this was followed by ill-defined threats—[HON. MEMBERS: "Oh."]—which went much further than the words, quoted by the right hon. Gentleman, of either Mr. Macmillan or the Prime Minister at the time of the Thetis disaster?
Is it not the case that what is ruled here by this House concerning our own proceedings has no bearing on or legal power over what happens outside the House? Is it not also true that what the Attorney-General says about the law has no power outside this House?
In fact, is it not the case that the public can make comments on this matter—that individuals can make comments, and have done so since the Attorney-General's statement—provided that they are not liable to influence the President of the Court or the members and thus provide a contempt? Is that not the legal position? Therefore, is it not absolutely right that there should have been criticism of the Attorney-General, who ought to take the utmost care to avoid confusing his legal, Governmental and party positions, and that a statement on any question of contempt would have come much better from the President of the Court?

The Prime Minister: The Leader of the Opposition is right in saying that time will be needed perhaps to study some of the precedents I quoted—which is all the more reason why he should not have rushed, as he did last Saturday, just as he always does without knowing the facts, into a scurrilous attack at Scarborough on my right hon. and learned Friend. I know that the right hon. Gentleman was speaking to a particular gallery, but in the light of my statement today I hope that he will reconsider his remarks at that meeting and withdraw them.
It is a fact that any comment is out of order, as my right hon. and learned Friend said, on matters which it will be the express function of the Tribunal to investigate. It is not only a question of any comment seeking to influence the learned judge and his colleagues—no one here thinks that Lord Justice Edmund Davies or his colleagues will be influenced by what they may read in the Press—but as my right hon. and learned Friend said, much more serious is the extent to which witnesses may be making statements as a result of a quite bullying interrogation, such as we all know often happens on television, at a time when they are making statements to the officers of the Tribunal. It is contrary to the success of the Tribunal if this sort of thing can go on.
The right hon. Gentleman is quite right in saving that the decisions we take in this House to regulate our own conduct do not have the force of law outside. This must be a matter for the courts and for the Tribunal itself. But the fact that we ourselves throughout all these years—and I could quote many more precedents—have placed a complete ban on Parliamentary discussion, would provide, surely, some justification for drawing the attention of those outside to some of the dangers if discussion was uninhibited, as it undoubtedly was in the television interview to which I referred.
It must, of course, be for the courts ultimately to decide whether contempt has occurred. My right hon. and learned Friend was right to warn those who might comment, for example, in a live interview on television, of the possible consequences. No one in the House wants to get into the position, any more than the then Government did, of a Tribunal leading to the imprisonment of people acting in accordance with their judgment but not knowing what the consequences of those actions would be.

Mr. Heath: The Prime Minister is only confusing the issue by citing as precedent what we ourselves do in the House. The Attorney-General went further than the existing law in his statement. The right hon. Gentleman has quoted the specific case of witnesses being cross-examined on television and from that has drawn the conclusion that any comment of a general nature must be stultified. That is not a

situation which those outside are prepared to accept. Is the Prime Minister aware that he may try to bully the Press and may try to bully us in the House, but that however much he tries to prevent—[HON. MEMBERS: Oh.]

Mr. Speaker: Order. Hon. Members ought to be able to listen to something which they do not like.

Mr. Heath: However much the Prime Minister may try to prevent us from stating what we believe to be the truth, both inside and outside the House, he will certainly fail.

The Prime Minister: No hon. Member would ever be so cowardly as to try to bully the right hon. Gentleman.
I was dealing with the duty of my right hon. and learned Friend as he saw it in the statement which he made last week. There was no question of bullying and I still hope that the right hon. Gentleman will withdraw the scurrilous attack which he made at Scarborough last week.
If the right hon. Gentleman thinks that it was unnecessary for my right hon. and learned Friend to speak in the terms which he used—after consulting Lord Justice Edmund Davies, who knows more about the conduct of this Tribunal and what should and should not be said than the right hon. Gentleman does—and if the right hon. Gentleman thinks that it was wrong for my right hon. and learned Friend to make this statement, I ask the right hon. Gentleman whether he thinks that it is possible for this Tribunal to do its work when, for example, there has been a television interview, of which I shall be glad to send the right hon. Gentleman the text, which provoked the statement and in which there was a cross-examination of an individual which would never be permitted in any court of law—I am not concerned with the rights and wrongs of what was said, but with the merits of the fact that words are brought out at interviews and then put on the record for all time and can invalidate, or might invalidate, to some extent the views of those witnesses in future—in which it was said:
Now, I have as a young journalist attended and reported several public inquiries into pit disasters … And in nearly every case I have to report to you, that when grief had safely abated, the final report was a frustrating exercise in official whitewashing.


In the light of that, at the very moment that the Motion was on the Order Paper of the House of Commons, does the right hon. Gentleman still think that it was wrong for my right hon. and learned Friend to give this warning?

Sir J. Hobson: Sir J. Hobson rose——

Hon. Members: Oh.

Mr. Speaker: Order. We are discussing a very serious issue and we ought to be able to discuss it quietly.

Mr. Shinwell: On a point of order. Are you to allow a debate, Mr. Speaker?

Mr. Speaker: The answer is, No.

Sir J. Hobson: Does not the Prime Minister realise that the matter under discussion is not whether the Attorney-General was right to have made his statement? Nobody suggests that it was not correct for him to criticise action which affected the impressions of witnesses. The matter which was criticised and which I immediately raised was the form of the statement in trying to prevent outside comment of any sort and whether that did not go much too far. The laws of contempt which apply to the courts and to this Tribunal prevent only those comments which are liable to influence witnesses, which is quite right, but many other people are perfectly entitled to make reasonable comments.
The Prime Minister quoted one comment. On Saturday, after the Attorney-General's statement, Lord Robens said that the Aberfan disaster had produced a new hazard in mining about which we knew nothing before. Surely, one of the very aspects into which the Tribunal will be inquiring is whether the N.C.B. did or did not know about that. If we are to have a complete shut-down of Lord Robens and anybody else, does not that show how absurd it is?

The Prime Minister: The right hon. and learned Gentleman put the same question to my right hon. and learned Friend. My right hon. and learned Friend had referred to comments on matters which it would be the express function of the Tribunal to investigate. Following further questions from both sides of the House, my right hon. and learned Friend said:
The important thing"—
and this was being limited and defined—
is that there should not be either prejudging of the issues or such interference—if

that is not too harsh a word—with witnesses as to embarrass their future position as potential witnesses before the Tribunal."—[OFFICIAL REPORT, 27th October, 1966; Vol. 734. c. 1320.]
I would have thought that that was an unexceptionable statement.
The right hon. and learned Gentleman had a perfect right to try to elucidate from my right hon. and learned Friend what he wanted, but even his authority and protection will not justify a statement such as:
There are always those in authority who will seek to suppress news and stifle comment … sometimes openly, as when the Attorney-General issued his threatening caveat last Thursday.
Those were the words of the right hon. Gentleman the Leader of the Opposition.
I hope that, as I have said, when he has had time to study what has been said today, the right hon. Gentleman will withdraw that slur on my right hon. and learned Friend. Alternatively, if he feels that this matter should be gone into further because it is a matter of great public importance, we would be very happy to have discussions through the usual channels to see that it is.

Mr. James Griffiths: I thank my right hon. Friend for his statement. May I add a word about this terrible accident, which has aroused deep feeling and anger, speaking as one who, in his time, has attended inquiries into pit disasters? What is now needed is for the inquiry to be undertaken as soon as possible and to be a searching inquiry without fear or favour.
As one who has known the Attorney-General all his life, and known his family, may I say how deeply I was hurt, knowing his character, by what was said and rumoured about him? May I assure my right hon. and learned Friend, who knows and who is attached to his people and who has served Merthyr as Recorder, that I believe that he will apply his full power to making this the searching inquiry which we all want?
The Leader of the Opposition was far below himself in what he said, and I hope that he will now rise like a man and withdraw it.

The Prime Minister: I thank my right hon. Friend the Member for Llanelly (Mr. James Griffiths) for what he has


said. I am certain that, as was clear a week ago, it is the wish of every hon. Member that this Tribunal should get at the truth, whatever it is, and that it should have every facility for doing so. What I regret—and this is why I made my statement today—is that a statement made in good faith by my right hon. and learned Friend for the very purpose of enabling the inquiry to do its work should have been dragged through the political mud in the way it has this weekend and by newspaper articles which, on consideration, I think that those who wrote them would regret.
I gave the reasons why I thought that It was necessary to make the statement. The whole House, hon. Members opposite as well as on this side, know the record of my right hon. and learned Friend, his liberal record in many matters legal before he came to his present position and his integrity throughout as Attorney-General, but not least as coming from South Wales, feeling as strongly as anybody in the House that we must get at the truth. If hon. Members opposite still want to support the Leader of the Opposition, they will at any rate agree that my right hon. and learned Friend acted in complete sincerity in performance of what he believed to be his duty.

Mr. Hooson: Is the Prime Minister aware that his statement will give general satisfaction, in particular to those in Aberfan who are most concerned that there should be a thorough, searching and fair inquiry into the causes of this appalling disaster? Is he further aware that what was said by the Attorney-General last Thursday was a perfectly correct statement of the law, that it needed to be stated and that those who have any legal experience know how dangerous it is for witnesses to be rehearsed in their evidence, since evidence tends to change imperceptibly and unconsciously when rehearsed in this way? Is he also aware that what he has said this afternoon will give general satisfaction to those who want to get at the real truth of the matter?

Mr. Lipton: While accepting in full everything my right hon. Friend has said today, would it not have obviated much misunderstanding and unfortunate comment being published since the statement was made last week had my right hon. and learned Friend the Attorney-General made it clear that the prime reason for making his statement was the objectionable and deplorable interviews which took place on television? Does my right hon. Friend agree that, on the whole, the Press behaved fairly responsibly and that the main and driving reason for my right hon. and learned Friend making his statement was the danger of a possible repetition of the television interviews, which everybody thoroughly deplored?

The Prime Minister: When I was at Aberfan I found that all the officials—the Chief Constable, the Mayor and others—paid tribute to the Press for their restraint on a very difficult day in questioning relatives and those who had a job of work to do. The television question is, as the hon. and learned Member for Montgomery (Mr. Hooson) said, the key to this matter. It is not merely a question of rehearsing witnesses, but of rehearsing them in the full glare of the television lights, with millions of people watching, and the fact that the statements which they made may make it harder for the tribunal to get at the truth later on.

Sir Knox Cunningham: On a point of order, Mr. Speaker. The Prime Minister has told us that when a Tribunal of Inquiry is set up, this House will cease to discuss the matter. We have, in fact, been discussing this very important matter for quite a time. The Prime Minister has also been giving examples from the Dispatch Box of criticisms which have been given. Is all this in order, here in the House?

Mr. Speaker: The hon. and learned Gentleman makes a very good and subtle point. Hon. Members must leave it to the judgment of the Chair to rule on what is or is not in order. The fact that I have permitted it makes it in order.

HEARING AIDS

Mr. Laurence Pavitt: I beg to move,
That leave be given to bring in a Bill to provide for the establishment of a Hearing Aids Council to register traders engaged in the manufacture or supply of hearing aids, to advise on the training of salesmen and audio-logical technicians, and to regulate trade practices
My proposed Bill is sponsored in all quarters of the House. I am seeking consumer protection for quite a small but, nevertheless, well-defined section of the population. It was estimated in 1964 by a learned medical practitioner, Mr. P. Gregory, that the number of people in Britain suffering from hearing disabilities totalled about 2¼ million. These people need some protection in purchasing the instruments which they use to cope with their disability.
The Bill is not aimed at the ethical and reputable firms, of which there are many and which serve the community by the provision of hearing aids. Indeed, yesterday I had the pleasure of meeting representatives of the Hearing Aid Manufacturers and Suppliers Association and the Secretary of the Society of Hearing Aid Audiologists, who, in general, gave a large measure of support to the move I am making. The Bill is welcomed by the trade because it would provide more professional status and improved standards to help it in the job it seeks to do.
My main concern is to stop some hard-selling salesmen from fleecing hard of hearing, innocent and often elderly buyers; and although only a small section of the trade is involved, the problem is formidable. Hon. Members may have seen a recent television programme in which Fyffe Robertson examined the matter in detail. They may also have read an excellent study made by the Daily Mail and published on 26th August. This examined cases where people had paid quite large sums of money, often when they could not afford to do so, for instruments which were not adequate for the purpose for which they were required.
Since I introduced a similar Measure on 1st March I have received a great many letters, particularly from elderly people, complaining about the purchase of certain instruments, complaining some-

times about the difficulty they had experienced in recovering their money or getting the instruments repaired. I pay tribute to the Royal National Institute for the Deaf for the way in which it has tried to deal with such complaints and for the service it has given.
A part of the doorstep campaign of selling hearing aids includes—certainly in my constituency and, I am sure, in others—the placing of handbills through front doors in an effort to persuade people to take tests at, say, the local Methodist hall. This sort of selling inevitably leads to difficulties, particularly as suppliers of hearing aids should also provide the right kind of coverage, the necessary service to the aid, and education and the rehabilitation, so to speak, that follows when one first uses a hearing aid.
The sort of "gimmick" indulged in by the salesman about whom I am speaking means that a person who is hard of hearing is fitted with an aid, and can then hear a clock tick for the first time for many years. He buys, but may well find that he will not be able to hear ordinary, intelligent conversation. One can, therefore, easily be sold an unsuitable hearing aid, remembering that education in the use of these appliances is important if one is to become accustomed to using them correctly. I use a hearing aid and estimate that it took me three months to get used to it.
The Bill would provide for the establishment of a Hearing Aids Council which would consist of not only representatives of the trade, but of consumers, otologists or doctors who specialise in E.N.T., audiologists, with an independent chairman appointed by the Government Department concerned. The purpose would be to establish a register of traders—and only registered traders would be permitted to operate in this sphere—to draw up a code of practice, in the main similar to that at present voluntarily pursued by the trade, to deal with standards of training and to have some supervision over advertisements.
The sort of advertisement which is misleading is that which states, "You are not really deaf at all; only out of focus". Or it might describe a hearing aid as, "Absolutely invisible", when no hearing aid can be absolutely invisible The Bill proposes that the Hearing Aids Council will deal with complaints and


that there would be disciplinary machinery to ensure that registered traders who were doing their job properly, were protected from those who failed so to do.
I should, perhaps, make it clear at this point that in the previous Bill which I sought to introduce I inserted a provision for compulsory medical examination before hearing aids could be sold. I have now withdrawn that provision. I have done so reluctantly because I consider it important that people should be medically examined. However, I have accepted assurances that we will achieve a measure of the same result by co-operation with the trade and by voluntary means, and I have, therefore, not included in the Bill a Clause which would have made prior medical examination compulsory.
The Bill could represent the start of a new deal for the deaf. There is urgent need for the protection which the Bill contains and for a greater degree of understanding of the problem. It is surprising that this disability receives less sympathy from the community than many other disabilities; that to some people hearing aids are not socially acceptable. Although a highly specialised medical sphere, this disability receives less sympathy and help than it deserves, although longevity means that an increasing number of people will suffer from it.
For the protection of those who are valiantly trying to overcome the problems of deafness, the withdrawal that it invites and the loneliness it can engender, I ask the House to afford this protection and agree to the improvements contained in the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Pavitt, Mr. Will Owen, Mr. Turton, Mr. Alasdair Mackenzie, Mr. Robert Edwards, Dame Joan Vickers, and Lord Balniel.

HEARING AIDS

Bill to provide for the stablishment of a Hearing Aids Council to register traders engaged in the manufacture or supply of hearing aids, to advise on the training of salesmen and audiological technicians, and to regulate trade practices; present accordingly and read the First time; to be read a Second time upon Friday, 3rd February, and to be printed. [Bill 122.]

Orders of the Day — NATIONAL COAL BOARD (ADDITIONAL POWERS) BILL

Order for Second Reading read.

4.10 p.m.

The Minister of Power (Mr. Richard Marsh): I beg to move, That the Bill be now read a Second time.
This short Bill is intended for a limited and specific purpose. It is non-controversial, at least I hope so. It is a very simple little Bill, designed purely to enable the National Coal Board to participate in the search for oil and gas on our part of the Continental Shelf and in territorial waters.
When my predecessor announced in November, 1965, that applications would be invited for further production licences, he said that in awarding such licences he would take account of any proposals which might be made for facilitating participation by public enterprises in the development and exploitation of the resources on the Continental Shelf. I do not think that any Member of the House would find anything wrong in the public sector of industry being involved in this great new exercise.
Two companies, Gulf Oil (Great Britain) Ltd. and Allied Chemical (Great Britain) Ltd., subsequently gave the Coal Board options to participate in any licences that might be granted to them, and these companies were, in fact, among those granted licences. Unfortunately—and this is the problem with which the House is dealing today—these options cannot be taken up under the Board's existing powers. Therefore, to enable the Board to participate in this way, the statutory powers have to be extended to enable it to undertake activities connected with the getting of petroleum.
No one is in any doubt at all that the prime purpose of the Coal Board is to get coal and the Board has assured me that there is no doubt at all that such activities would in no way prejudice its primary concern with the coal industry. As I hope to show, it will in some ways assist the Board. There is no need to emphasise the great importance to this country of indigenous natural gas. It is already clear from the studies that we


have made that even in the short term the benefits to the balance of payments position will be very considerable. Obviously, we have to exploit every possible opportunity of easing the strain on our economic position, and low-cost fuel supplies can contribute significantly to efficient low-cost production. All these questions are receiving particular attention in the fuel policy review in which the Ministry is currently engaged.
Here I would like to repeat what I have said about natural gas. It is neither a threat nor an alternative to the coal mining industry. For as far ahead as anyone can see, not for social reasons, but hard economic reasons, this country will need all the coal that it can produce at economic prices. I regard this new venture, which the enactment of the Bill will make possible, as one which may well benefit the Board by enabling it to participate in a new dynamic industry. It will also benefit the general development of that industry by public participation. There is no reason at all why this part of the public sector should not be enabled to become involved in this exercise.
The right to explore and exploit petroleum in the United Kingdom and part of the Continental Shelf is vested in the Crown. The Government decided to license both private and nationalised industry to get petroleum on terms that were considered advantageous to the national economy. I do not think that we always completely realise how highly speculative petroleum exploration is. Governments or public enterprises cannot spread their risks world-wide, like the big oil companies. Nor would they have, at the outset at any rate, the initial expertise to press ahead rapidly with developments.
Increasing participation by public enterprises in fresh licences, as was done in the second round of licences in November, 1965, is one way of increasing the level of public participation without taking on board the disadvantages which would occur if the State were to attempt to do the job entirely by itself.
It seems incredible to recall that when my right hon. Friend made his statement in November, 1965, we were still talking only about the possibility of commercial finds of oil or gas at some time in the

future. At that time no one was certain whether there were any supplies of oil or gas in commercial quantities to be discovered. Everyone hoped that there would be, but no one could say what the position was. This did not stop a lot of people speaking and writing about it.
Perhaps I may use this opportunity to bring the House up to date on developments in the North Sea so far. As the House will recall about 41,500 square miles of the British sector of the Continental Shelf were allocated in 1964–65 to 25 companies in groups who have now committed themselves to spending a minimum of £110 million in initial exploration work. Although exploratory drilling began less than two years ago, 14 of the licensed companies or groups have drilled or are now drilling. Eight mobile rigs and two fixed platforms are at present in use; 25 wells have been completed and 10 are being drilled.
There have been disappointments and there have been about 20 wells which have not produced gas in commercial quantities. I sometimes think that it would be a good idea if we paid as much attention to those which do not produce this great bonanza as we do to the minority who are lucky.
I am pleased to say that six potentially commercial gas-fields have so far been discovered, ranging from 15 miles northeast of the Norfolk to about 80 miles east of the Humber, and that the first underwater pipeline has been completed to the British Petroleum Company's field, the first to be found.
It is worth saying that no one anywhere in the world has exploited resources of this type as rapidly as all sections of British industry have done. It is a remarkable achievement that we have gone so far in such a relatively short time.

Mr. John Peyton: In dealing with this point, would the Minister recognise that an enormous amount of work has been done by officials in his Department who, in a very short time, have got this operation going, and who have never had a proper share of the credit? Although this is, in some measure, a success story, I do not understand how he is using it to justify the intervention of the Coal Board.

Mr. Marsh: On the last point, there is much more yet to come. On the hon. Gentleman's first point, after the discussions that we have had elsewhere in this House, it is a pleasure to say that I agree, for the first time for the last two weeks, with every word that he has uttered.
An enormous amount of work has been involved on the part of the unheralded and unsung "bunch" who are responsible for so many of the successful things for which politicians take credit. None the less, although it is a success story, there are qualifications which one has to make. Licensees have started work, not surprisingly, on what appeared to them to be the most promising structures. All the same, the results to date are very satisfactory.
It is not possible, as yet, to give any estimate of the reserves of the fields. We need to sink many more appraisal wells to establish the full extent of the gas-bearing formations. I am confident that supplies of natural gas will be available on shore by the end of next year, at the rate of about 200 million cu. ft. a day and will build up to at least 1,000 million cu. ft. per day by 1970. This figure is a minimum estimate and could be significantly higher, particularly if further discoveries are made.
There are physical limitations on development, particularly the need to lay undersea pipelines. This may prevent a more rapid build-up even if more gas turns out to be available. But I am keeping the assumptions for planning purposes constantly under review as the work proceeds. It would be quite absurd to get fixed in specific attitudes to this exercise when there is still so much to be learned and so much more information to obtain.

Mr. Tam Dalyell: I have a constituency interest on the question of the pipelines. Do I understand that there is difficulty in providing a sufficient quantity of pipelines quickly?

Mr. Marsh: There are specific physical difficulties in laying the pipelines. The North Sea is a difficult place in which to lay underwater pipelines. Much depends on the weather and the time of the year as to how easy it is to lay pipes of this type and size. The figure which I quoted, 1,000 million cu. ft. a day, as the figure

which may be, and almost certainly will be, available by 1970 is approximately equal to the whole of the present supply of town gas. It is roughly equivalent in heat value to about 13 million tons of coal a year.
The House will appreciate that the two compames which have given options to the Board are anxious to go ahead with their plans. The extent to which the Board will be likely to participate in the licences and contribute towards the cost has a very important bearing on the formation of the licencees' plans. It is, therefore, understandable that these companies and the Board wish to enter upon discussions to decide on the implementation of the options at the earliest possible date, and the enactment of the Bill will put the Board in a position to embark on these discussions.
I have considered very carefully the extent of the powers to be given to the Board for this purpose. On the one hand, the Board must have the powers which it needs legitimately to operate on a basis of reasonable equality with its partners if it is to obtain proper value for the investment which it will be making. Consequently, it will need powers to operate in partnership or on its own and power to sell or supply its share of any petroleum found, including connected activities such as transporting, storing and treatment for removing impurities before sale. It also needs to be able to operate in relation to any international agreements for the joint exploitation of fields extending across the international boundaries of the Continental Shelf if only to ensure that it gets its full share of the petroleum in the areas where it is licensed.
I have, however, decided that I should not seek to give the Board powers to engage in wider activities concerned with petroleum refining and distribution and petro-chemical manufacturing. If, later, it appeared that any such activities could be carried on by the Board with advantage to the national interest, the Government will come to the House again with further proposals.

Mr. Arthur Palmer: Would my right hon. Friend say whether the Coal Board wishes to have those powers?

Mr. Marsh: It has made no representations to me on this matter.
What we want to do in the first instance is to see where we get with this exercise and to see what advantages there are. We must recognise that the prime purpose of the Coal Board is to produce coal. It is a very difficult industry with many problems. If a case were made that it was in the national interest that the Coal Board should engage in these other activities, of course the Government would be under an obligation to come to the House and ask for those powers and would expect the House to provide them.

Mr. Patrick Jenkin: Is the Minister aware that it has been expressed as a legal opinion in a number of circles that the Bill, if it were passed in its present form, would give the Coal Board power to engage in oil refining, petro-chemical manufacture and such activities? Would the Minister be prepared to accept an Amendment in Committee which would make it absolutely clear that the Bill has only the limited intention which the Minister said the Government intend that it should have?

Mr. Marsh: Nobody would press for additional powers unless it were felt that there was a case for the Coal Board having such powers in the national interest. I cannot understand why the hon. Gentleman gets so instinctively upset at the prospect of the Coal Board getting involved in this matter. My advice is that the Bill does not carry the interpretation which the hon. Gentleman has stated. Far be it from me as a layman to start interpreting what lawyers mean when they get loose on these things.
We are not seeking to give the Board power to engage in activities concerned with petrol refining and distribution and petro-chemical manufacturing. At the moment, we are dealing with the specific question of options which exist, the Board having a desire to become involved in this activity. In the meantime, the Board will be able to use any petroleum got from the Continental Shelf, either by itself or by other licensees, in works and installations operated by the Board under the powers contained in the Coal Industry Nationalisation Act, 1946. In the case of gas, it will be governed by Section 9 of the Continental Shelf Act. I hear complaints that the

nationalised industries should not be treated any better than the private sector. I find it difficult to understand why they should be treated worse.
I have a further point to make on the powers conferred under the Bill. It would be appropriate to apply to the Board the same restrictions on activities outside Great Britain as apply to activities under the Coal Industry Acts. Thus, any gas or oil got under these powers may be treated and disposed of only at well-head or in Great Britain unless I make an order authorising it to be done elsewhere.
The activities of the Board under the Bill will be conducted within the general framework of regulations governing all other operators in the United Kingdom part of the Continental Shelf. In addition, the Board will operate under the general provisions applicable to its activities under the Coal Industry Acts—for example, as regards financial accountability. That is a point which comes to mind. No estimates can be made at present about the amount of expenditure likely to be incurred by the Board. The expenditure is not likely to be heavy during the exploration stage, but if oil or gas were found major expenditure on pipelines, storage and treatment facilities would be required. In that case, the Board would be drawing gas, and this would be helping to pay for it.
The Board cannot start substantive discussions on finance with its prospective partners until it is able to commit itself legally. Moreover, I cannot say how far it will wish to confine itself to the options at present available. It is not restricted under the Bill in this respect. The extent of forward expenditure will be settled in consultation with me from time to time under the general provisions of the Coal Industry Nationalisation Act. In the early stages I would expect the Board to be able to finance its share of costs well within its existing borrowing powers. Depending on the extent to which the Board takes up its present options and the pace of development, it has told me that it does not envisage expenditure on exploration in the first few years of much more than about £6 million.
In explaining the effect of the Bill, I have tried to show that I propose to give the Board all the powers it needs to make


the venture a success. I cannot prophesy, and neither can the Board, whether it will find oil or gas in commercial quantities. I would, however, commend the Bill to the House as one which will give a major nationalised industry a stake in a new indigenous fuel.

Sir Gerald Nabarro: No one in the House disputes the value of North Sea gas and oil to our national economy; that is not in question. But would the Minister devote at least a small part of his speech to demonstrating to the House that the Coal Board is likely to be able to win this gas and oil more efficiently and more cheaply than the 25 private enterprise oil companies and the consortia between them which are already in action? What makes the right hon. Gentleman believe that the Coal Board is a better instrument for doing that?

Mr. Marsh: With respect, the hon. Member for Worcestershire, South (Sir G. Nabarro) misunderstands the argument. This is not an alternative to any of the 25 companies. It is merely giving the Coal Board the same rights as have been given to the oil companies.
If I may pursue the point one stage further, it is also a fact that the best evidence of the contribution which the Coal Board can make is provided by the offer of options by major oil companies, who want the Coal Board's expertise with them.

Mr. Nicholas Ridley: If the right hon. Gentleman sticks to that point of view, surely, in logic, he should allow the major oil companies to undertake the digging of coal, which they are not allowed to do at the moment.

Mr. Marsh: If any of the major oil companies expressed a desire to dig for coal, we should certainly look at that with an open mind in an effort to be reasonable.
On this particular case, one really has to give some weight to the fact that this is not just a question of the Coal Board seeking to expand its empire because it wants to get involved in all sorts of activities. It is a major source of indigenous fuel, and it is a way of increasing the rate of exploration which is impor-

tant. It is not an alternative. It is putting in a new element, increasing the rate of exploration in the North Sea. The main point is that this is a case where experienced oil companies are inviting the Coal Board to take up options with them for no other reason than that they think the Board has a contribution to make. They are at least as good at judging the contribution which can be made in the North Sea as anyone in this House.

Mr. Peyton: Does the right hon. Gentleman not think that the eagerness of some of the oil companies to hitch on to the Coal Board springs not from a great admiration of the Board's expertise in something which it has never done, but from a desire to associate themselves with the favourable position in the mind of the Government which the Coal Board, as a nationalised industry, undoubtedly occupies?

Mr. Marsh: I do not think that they are as Machiavellian or as naïve as that. I think that it is because it is in everyone's interest that the rate of exploration in the North Sea should be as rapid and as intensive as possible.
Here we have an organisation which has a great deal of expertise in drilling and in associated fields of activity. It is important that the public sector should have as big an interest as possible in these indigenous resources. If a position arises where, for commercial reasons, commercial companies who are expert in this field of activities are prepared to work with the Coal Board, in view of the fact that the oil companies want its assistance and contribution, the Board wants their contribution, and the nation wants as heavy and as rapid an exploitation of the North Sea as it can get, what sort of blind prejudice is it which wants to stop them? They have a contribution to make. They can make that contribution.

Mr. Eric Lubbock: I wonder whether the Minister can help the House, because it may be that hon. Members are not aware of the extent to which the Coal Board is engaged already in drilling in the shallow waters round the Continental Shelf. Could he give the House any figures to indicate the extent of its interest? Could he also tell us what other companies which are not at present engaged in oil exploration, such as I.C.I.


and Rio Tinto, are in partnership with the oil companies in the North Sea?

Mr. Marsh: I will answer the hon. Gentleman's first point later in the day, if I may. It is a fact that the Coal Board is engaged in a number of activities associated with explorations of the type which he mentions.
On the Gentleman's second point, he is quite right in saying that there are a number of companies heavily engaged in the North Sea because of their petrochemical interests, because of their interests as consumers and, in this case, because of their interest in fuel. This is not just a one type of organisation exercise. There are a number of organisations there, and there is no reason why the Coal Board should not be involved.

Mr. Alex Eadie: Is my right hon. Friend aware that at this year's national conference of the National Union of Mineworkers, at Scarborough, we welcomed the finds of gas in the North Sea, contrary to the general feeling that the union is restrictionist and Luddite in its philosophy? Is he also aware that the conference expressed great anxiety that this sort of indigenous resource should be left exclusively to private enterprise?

Mr. Marsh: Yes, I know of the discussion which went on, and the intention is that it shall not be left exclusively to private enterprise. One of the things which we are doing is to provide for a further degree of public participation here, as was the intention from the beginning. It could prove to be a very expensive business for any group which was not in a position to spread the risk in activities elsewhere in the world. Within the Labour Party at the moment, discussions are going on on the whole question. I know of the resolution to which my hon. Friend refers.
In conclusion, the Bill is one that will give a major nationalised industry a stake in a new indigenous source of fuel. It will increase the extent of public participation in a new and important industry. It will enable the exploration in the North Sea to be increased in its intensity because of another addition to those who are exploring. For all those reasons, I commend the Bill to the House.

4.35 p.m.

Mr. F. V. Corfield: We associate ourselves with the right hon. Gentleman's remarks about the importance of indigenous supplies of fuel and the welcome that he gave to the success that has already, apparently, attended the efforts in the North Sea.
I am bound to say, however, that I have not become convinced either by what he said today or by what I have read of other arguments in the past, that this extension of power is in the public interest. I can see that it is in the interests of the Coal Board and those of two American companies.

Mr. Eadie: And the miners.

Mr. Corfield: I do not even accept that one. But it is not self-evident that those interests and the national interest are the same thing. Certainly the Minister has not directed his arguments in any way to show us how the national interest is concerned, as opposed to those others.
The whole concept of nationalisation is one of the fundamental political philosophies which divide this House, so that it is probably not surprising that I should approach the matter from a somewhat different standpoint from that of the right hon. Gentleman.
Whatever the pros and cons of the optimum size of any industrial undertaking, which was a matter that we discussed a few weeks ago when considering the Industrial Reorganisation Corporation Bill, there cannot be any suggestion that the National Coal Board is too small. It is a positive boast of the Board that, outside the Civil Service, it is the largest employer of labour in the world second only to General Motors. It is its boast that it is the third largest concern outside the United States in terms of assets—[Interruption.] I am merely repeating what the Coal Board says. Perhaps the right hon. Gentleman will reserve his remarks for later. And it is the third largest concern outside the United States in terms of sales.
That, by any standards, represents a fairly large concentration of economic power. Because it is also a monopoly, it is power divorced from the checks and balances of the market which operate in the field of private enterprise. Those are checks and balances for which—with all


respect to the efforts of the Select Committee on Nationalised Industries and with a considerable admiration for its work—those efforts are no substitute.
Because it is a nationalised industry, it is, quite inevitably, tied up with politics. I therefore make no apology for starting this exercise from the proposition that when one is confronted by a vast complex of politico-economic power of this nature, it is for those who wish to extend the power to justify it, and not the other way round, and in my view that onus has not been discharged. Indeed, all the arguments that we have heard this afternoon, those I have read in the Press, statements by Coal Board officials and those obtained from people who have more technical knowledge than we have, point the other way.
The first argument advanced by the Minister's predecessor when he made his statement on 24th October was that the exercise of these powers would increase British participation in the North Sea. Of course they will. So will any other British investment, but that does not constitute an argument for bringing in the Coal Board.
As I read Section 2 of the Petroleum Act, 1934, which is incorporated in the Continental Shelf Act, it is fairly clear that power is vested in the Minister to grant licences
to such other persons as he thinks fit.
If the Minister thinks that there is an imbalance between foreign and British capital, there would appear to be plenty of ways in which to readjust that imbalance other than by bringing in the Coal Board.
In any case, if, for example, British Petroleum, which, after all, has the immense advantage that the Government not only get a predominant share of its profits, but a fat tax contribution as well, feels that it is unable to extend its participation, why the Coal Board rather than the Gas Council?
When all is said and done, the nationalisation Acts of the 1945–50 Government were based on nationalisation by function, and, as far as I can understand, if the Minister's assurances are to be accepted at their face value, and I am sure they are, this is also the basis of the current Steel Bill. Just as the Coal Board was

set up to take over the coal industry, and must be presumed to have recruited a staff who knew about coal, the Gas Council was set up to take over the gas industry, and presumably knows about gas. Are we really to be told that these two American companies, Gulf Oil, which I believe has 35 blocks, and Allied Chemicals, would not have been equally attracted by an offer from the Gas Council had one been made? After all, there is no greater difficulty in extending the borrowing powers of the Gas Council for this purpose, than there is in extending the borrowing powers of the Coal Board.

Mr. Marsh: I fail to follow the logic of the hon. Gentleman's argument. He is basing it on function. He is aware that the gas industry is fully experienced in the distribution of gas. If one takes the hon. Gentleman's argument at its face value, the gas industry has no experience of drilling in the North Sea, any more than I.C.I., or Rio Tinto, or a host of other organisations.

Mr. Corfield: It is concerned with the manufacture of gas, with the economics of natural gas versus manufactured gas, and with the economics of natural gas extraction. It has the same sort of tie-up with American firms as is proposed for the Coal Board, so I do not think that the Minister's argument is relevant.
Perhaps I might put the alternative question: were these licences granted to those two American companies in any way dependent on these companies granting an option to the Coal Board?

Mr. Marsh: Mr. Marsh indicated dissent.

Mr. Corfield: The Minister shakes his head, and I accept that there was not. If that is so, we have to believe that the Coal Board has an attraction for these companies which the Gas Council has not.
Is it the case that the Gas Council, which really must have greater expertise in the matter of gas, which is faced with an increasing demand for gas, confronted with the enormous potential which is opening up for it in the exploration which we have been discussing, decided that its participation of 6 per cent. was just about as far as it was prudent to go? If that is the answer, and if the conclusion to be drawn from that is that the Gas Council feels that it is wiser from its point of view to rely for any other gas which it


may wish to use as suppliers in the United Kingdom on private exploration—and on its privileged position under the Petroleum Act and the Continental Shelf Act which I believe to be perfectly justified—it is a little difficult to justify an almost equal participation—5 per cent.—by the National Coal Board. Despite the Minister's reiteration of the fact that gas is not a substitute for, or a threat to coal, which of course we accept, in the medium term, at any rate in the long-term, the likelihood is a fall in demand for the products of the Coal Board, and not only coal, but the various derivatives of coal, for various economic reasons.
The Coal Board is an organisation faced, too, with vast problems of uneconomic pits, of the redeployment to which that will give rise, and, moreover, a pretty depressing series of annual accounts, culminating in 1965–66 in the largest deficit of its 20 years' existence. It does not appear, on the face of it, that it is a sensible operation for the Board to go into further activities to this sort of tune, even if it is accepted that it should go in at all.
I think that it is self-evident, on the other hand, that the Coal Board has more than enough on its plate without branching into these fields for which it was never designed, and in which even this Government's passion for nationalisation must surely be satisfied by the existence of the Gas Council, and which, when all is said and done, ought to be facing, and ought to be encouraged to be facing, as exciting and as worthwhile a future as confronts any industry in this land in present circumstances.
It is not my purpose to denigrate the Coal Board.

Mr. Michael McGuire: The hon. Gentleman is doing his best.

Mr. Corfield: When I start, I can do much better than that. Goodness knows the Coal Board is faced with the most enormous problems, as I am sure the Minister agrees. Whatever the prospects may be for coal in future, in some areas it must be faced that those problems are bound to be problems of contraction, of closing pits, and of all the immensely difficult problems—redundancy, retraining, trying to move miners

from one mining area to another, and so on—which go along with that problem. There is also the problem of getting acceptance of vastly advanced mechanised methods of extraction such as those at Bevercotes which have not, despite the announcement in the Press this morning, been a roaring success in labour relations, or in the utilisation of capital.
Surely it is fairly clear that in many respects problems of restriction can be immensely more difficult to solve than problems facing an industry where the main emphasis is on expansion with its enormous effect on morale because of the opportunities that that engenders. I think that there is a strong presumption that the Coal Board has enough on its plate, and certainly the Minister has done nothing this afternoon to explain why it should feel that it has the energy in hand to branch out in this way.
Then there is the argument, which is most frequently used by the Chairman of the Coal Board, that one of the purposes of the Board should be to diversify, and that the whole object of that diversification, whether in this sphere or in others, is to protect the Board's investment in the mines. Certainly it was a relief in this connection, in view of the representations that I have no doubt many of us have had in the House, to hear that, at any rate, there was a virtual guarantee that this did not mean diverting money from the pits, and that it was intended to see that the pits had all the capital and modern equipment they require.
It is argued that diversification is something good in itself—I feel that that is the view of the hon. Member for Bristol, Central (Mr. Palmer) who said "Hear, hear "just now—because it conforms to modern business practice, particularly among the larger organisations, and because it is practised by private enterprise it is argued that it is right and proper that nationalised industries should not only be free to do the same but should be encouraged to do so. Again, as the Chairman of the National Coal Board has put it,
The whole object of our diversification is to defend this vast investment back at the pits. We are not branching out into any business which does not clearly serve this end.


That is something which wants studying. He goes on to refute any suggestion that this is backdoor nationalisation, and says:
That is wrong, and we could not do it, for nationalisation is Parliament's job.
That, too, is a relevant sentence in relation to the rest of the argument.
But there are at least three vital distinctions between this sort of diversification and that which is practised by private enterprise, and tends to be associated in the mind of the public with such great companies as I.CI., Unilever, Hawker-Siddeley and the like. These are important and, indeed, vital differences. The first is the question of commercial checks and balances. A private firm intent upon a merger or partnership with another firm—a take-over or acquisition of a substantial interest, whatever it may be—will be subject to the market. If new capital has to be raised the terms on which it can be raised will reflect the market's assessment of the soundness of the project. Even if no new capital is to be raised the terms of the take-over or transaction will reflect the market's assessment.
There can be no such check in the case of a nationalised industry with substantial borrowing powers guaranteed by Parliament and with the advantages of a monopoly supplier of raw materials in regard to some of the firms with which it is associated, or a monopoly purchaser of products with regard to others. When an institution of that nature makes the first approach it is ludicrous to pretend that the same checks and balances exist as operate in the private field.
This is particularly so when the National Coal Board itself—and it says this in its Report—is able to borrow at less than the market rate in order to lend at either the market rate or still a little below it. That puts it in a wholly different position from any private undertaking. Secondly, and following upon this, is the question of publicity. There tends to be, for one reason or another, very much less publicity when the National Coal Board acquires a major shareholding in a private company. Few people will have failed to notice that at the moment Burmah Oil is likely to acquire Castrol. I have no doubt that

many will soon forget it. What most will bear in mind is that Castrol has changed hands and is no longer an independent company, but how many people have the faintest idea that the Whittlesea Central Brick Company, or J. H. Sankey are virtually the National Coal Board, with a 90 per cent. and 60 per cent. shareholding respectively, under another name?
They can find out by buying a copy of the annual accounts, but even there there is no record of such firms as Thompson and Lee, of Bexleyheath, J. W. Rains, of Birmingham, or Henry Hawkins, and other firms acquired by the National Coal Board and absorbed into one or other of its subsidiaries, still trading under their own names. Nor will we find any mention of the more recent acquisition by J. H. Sankey of Bradleys. How many people would guess that the Coal Board owns 198 fully-paid shares in a firm called Farmway Ltd., formerly Northern Farmers Trading Association? If they did they would be a lot luckier than I have been in finding anything else, other than the bare facts in either the report or the accounts.
But in the case of more substantial holdings, even where the Board's interest is less than a majority holding, if the remaining shares are held by private individuals or a collection of private individuals and companies, as opposed to a single shareholding, it is clear that the voting effectiveness of the Board's block of shares will be very much greater than is proportionate to the actual size of its holding.
The Board has a 50 per cent. share in a firm called Coal Services (Sheffield) Ltd. and a 40 per cent. share in the British Anthracite Company Ltd., a relatively new acquisition, in respect of which one will find remarkably little in either the Report or the Accounts. It is obvious that in those cases a block of shares of that kind, although not technically a majority holding, in fact gives the Board control.

Mr. Marsh: The hon. Gentleman is making a lot of this. He might point out that he is talking in one case of a company in respect of which the total investment of the Board is £2,550. It does not add up to much.

Mr. Corfield: Where the Board has a holding which is not quite a majority holding—and I took the example referred to by the right hon. Gentleman because it is one of the 50–50 cases—with Staveley Chemicals it is a much larger sum with a much greater potential. But I took that as an example because I thought it important if we read what the Chairman of the Coal Board has said over and over again; it is to the effect that this is a partnership with private enterprise, but it becomes somewhat of a nonsense when it is clear that the real control lies with the Coal Board and not private enterprise.
I want to quote what the Financial Times says about the reason for the expansion into private enterprise. It says:
The National Coal Board recognises that coal is bound to come under increasing pressure from other fuels and that it cannot expect to be given special protection indefinitely. It therefore wants to find investments in other fields which help it to meet the new challenges. It believes that this can best be done by following two lines of approach simultaneously. One is to carry the attack into the enemy's camp by going into fuel distribution, and buying up builders' merchants, the people who install central heating systems. The other is to follow the example of the oil companies and to diversify into those industries where its main product is already playing an important role. The ones it has principally in mind are chemicals, bricks and building materials.
We should pause to ask ourselves where this argument leads us. Let us take the Sankey acquisition. This was a partnership entered into last year with a 60–40 percentage holding, to sell solid fuel appliances and to act as heating consultants and builders' merchants. No doubt on the face of it these are suitable activities and probably very useful ones in relation to boosting the use of coal, but if we consider the building merchants' side of the situation we learn that Bradleys' pre-cast concrete includes light-weight walling partition blocks and artificial stone, and that the Board counters any critics that it is using public money to expand into fields unrelated to coal by pointing out that suitably processed colliery shales can be used as light-weight aggregate in the manufacture of pre-cast concrete shapes.
It is important to know what proportion of coal products or by-products used by Bradleys or handled by other building merchant subsidiaries is regarded as justifying this sort of exercise. If these

colliery shales are competitive in both price and quality they will find a market without it being necessary to acquire enterprises covering the whole range of building materials. But the National Coal Board goes further than this. Its representatives are reported as saying that it regards these activities, along with its brick-making activities, as leading naturally to factory-made buildings, so the next departure will clearly be into industrial building.
If one accepts that justification, one must ask where on earth this will stop. There seem to me and to most of my hon. Friends very good reasons for stopping somewhere—and not too far along this road at that. One of those reasons, of course, is the one I have mentioned, that it cannot be fair competition when the National Coal Board, despite its heavy losses on profit and loss account, is so much better placed as a borrower, particularly under present conditions, than even the most successful medium-sized company can be today.
I must admit that I doubt whether any company, even one of our largest companies, could borrow even the sort of figure which the right hon. Gentleman mentioned—I doubt whether it would borrow enough to buy a postage stamp—if it had just written off £450 million on top of a consistent annual loss. Surely it cannot be the intention of Parliament that the National Coal Board should operate, as it clearly has been operating in effect—though admittedly on a limited scale—as a lending institution at cut rates.
However, the whole concept of protecting existing investment by this or any other means is surely a very dangerous one on which to justify any argument. There comes a time, in older industries and the more out-dated processes, or when there are economic changes, when protecting investment in private industry can be the fastest possible road to ruin. We all know this and it becomes very easily an exercise in pouring good money after bad. Any private firm which had undertaken an investment of the Bever-cotes nature without first ensuring a cooperative labour force would almost certainly have gone out of business.
This would be even more certainly the case for any firm which had attempted to go on producing from many of the collieries in the coal fields which for


many years have failed to show a surplus at all. I have some admiration for the efforts of the Coal Board to phase its closures and cushion the social effects, but there is a limit to the period over which such phasing can be carried out without placing a wholly uneconomic burden on the economy.
Summary B in the Accounts sets out the deficiencies and surpluses of the various areas and one cannot maintain that it makes anything but depressing reading. With the exception of one or two years in one or two cases, the Scottish, the Northumberland and Durham, the North-West, the South-West and the Kent coal fields, practically speaking, never show a surplus at all. Surely, this fact in itself further supports my contention that the National Coal Board has enough on its plate without branching out elsewhere.
My final reason for rejecting the idea of diversification for protection of investment is of a quite different nature. In the original Coal Industry Nationalisation Act, 1946, Section 1(1) set out—I am sure that the Minister will agree with this summary—that the function of the Coal Board, briefly, was to get coal and to make it available in reasonable quantities. Subsection (2) set out some fairly wide ancillary powers.
Perhaps they are best summed up in subsection (d). which says that they are among other things:
producing or manufacturing any goods or utilities which are of a kind required by the Board for or in connection with the working and getting of coal or any other of their activities, or which can advantageously be produced or manufactured by the Board by reason of their having materials or facilities for the production or manufacture thereof …".
These are wide terms, but they are tied very closely to Section 1(1), in other words, to the basic function of getting coal and making it available.
When we come to the powers given in this Bill, we are going right outside that basic function. We ought to ask—as the Minister has given no indication of the purpose of the Coal Board's participation and whether it is merely to form a follow-up for the Gas Board and provide more gas for the main system of the Gas Board—to what purposes will they put the gas, if and when it is found?

This must bring us to a consideration of another subsidiary, namely, Staveley Chemicals Limited.
The Minister may reply that, of course, it is entirely open to the Coal Board whether it sells to this subsidiary or not, but the likelihood is, as this firm has been set up to deal with these substances as a chemical factory that it will go to Staveley Chemicals Limited, another of Lord Robens's private enterprise partnerships which is not perhaps a very happy augury—since the other partner is Stewarts & Lloyds—bearing in mind the terms of the Iron and Steel Bill. The real point here is that when one examines the memorandum of association of this company, one finds that it has already taken far wider powers than anything available to the Coal Board itself.
Let me quote one or two of the provisions. They are:
To manufacture, prepare and sell chemicals and chemical products and to treat, refine, process and deal in all such substances and to buy, sell, export, import and deal in all substances, apparatus and things capable of being used in such business….
To manufacture, buy, sell, improve, repair, alter, prepare for market, treat, and deal in all kinds of plant, machinery, implements, tools, utensils, apparatus, hardware."—
etc. Finally:
To carry on any other businesses whether manufacturing or otherwise, which may seem to the company
to be useful in relation to the requirements of its activities.
These are perfectly ordinary provisions, I agree, of an ordinary memorandum of association of an ordinary chemical company, but, whatever the strict legalities of this may be, this, in effect, clearly brings the Coal Board, already—long before this Bill—into spheres in which Parliament clearly denied it the powers to go itself.
Nothing could be more precise than Section 1 of the Coal Industry Nationalisation Act. If we could return to that precision in some current legislation, things would be much easier. I therefore suggest that the Coal Board is already extending its powers almost certainly beyond what Parliament intended and almost certainly, indirectly—although I am not suggesting any illegality—a great deal further than it could possibly have gone itself but for these devices of the subsidiary company and the partnership.
We must ask whether this sort of operation, if this gas is to go to Staveley Chemicals, makes sense in terms of economics. As I understand it, the natural gas from the North Sea contains a high proportion of methane and is therefore suitable only for the production of ammonia, the alcohols and, if sufficiently cheap as compared with naphtha, of acetylene. For economic reasons connected with the gas industry, benzine derived from coal is, I understand, losing its place to benzine derived from petroleum. Whether or not this gas is to be used at Staveley, it would seem abundantly clear that the processes carried out at Staveley will become increasingly divorced from anything to do with coal.
For that reason, if for that reason alone, if it is not to be so used, we should be told so quite definitely and categorically. If we are told "No", we should also be given the Government's arguments for inserting what is, in effect, the spearhead of nationalisation into the oil industry. If it is to be so used, this Bill will have the effect of introducing a substantial element of nationalisation into the chemical industry. I am sure that even the Minister would agree that this Bill is not the vehicle for that purpose.

Mr. Marsh: I am sorry to interrupt the hon. Gentleman, but he asked some specific questions about the use of this gas. The position is that the Coal Board will be affected in this in exactly the same way as anyone else by the provisions of the Measure, and will therefore, in the first place, have to offer for sale to the Gas Council any gas it obtains. If it wants to use the gas for itself, as the National Coal Board, this it can do. If it wants to use it for a subsidiary, that would not be regarded as being itself within the meaning of the Measure and the Board would, therefore, have to get the Minister's permission, without having the slightest idea of how much natural gas there is. The Minister's permission would be needed if it were to be used by a subsidiary company, and it is likely that there will be much more gas than can be used by one organisation like that.

Mr. Corfield: I do not want to bring in the Attorney-General for the second time today, but if the Minister looks at Section 9 of the Continental Shelf Act he will see in the latter part of subsection

(3) that the Minister has power of consent
… but shall give his consent "—
"shall", not "may":
under this section to the supply or use of any gas if satisfied that it is for the purposes mentioned in that subsection.
The subsection there referred to is subsection (4), which mentions the purpose of petro-chemicals. If the Act does not mean what it appears to mean, we can probably flog the matter out in Committee, but on the face of it it looks as though, if the National Coal Board wants to use the gas for any other purposes than the Gas Council it has a perfect right to do so and, although it has to go through the formality of getting the Minister's consent, the Minister "shall" give his consent.
If it is the Government's policy to introduce a substantial element of nationalisation into the oil industry or the chemical industry—and it is clear that Staveley Chemicals will be wholly a nationalised chemical company in any case—they should come before the House and direct their arguments to the advantages of that course. With due respect to the Minister, the Government have not so far directed their arguments even to the proposition whether that in this Bill the national interest coincides with the Coal Board's interest. The presumption is that it probably does not, and the arguments point that way as well.
By any standards, the Coal Board has very ample powers. It has more than enough on its plate. Is is evident that through these subsidiaries its powers are substantially increasing, and far from their being increased further they ought to be diminished. I recommend my hon. Friends to oppose the Bill.

5.14 p.m.

Mr. Arthur Palmer: I looked forward—and I say this with very great friendliness to the hon. Member for Gloucestershire, South (Mr. Corfield), because he represents a constituency near mine—to an interesting speech from him dealing with the general principles of the Bill, but instead he seemed to run himself into the sands, and took us on a somewhat tedious tour of the portfolio investments of the National Coal Board.
Unlike the hon. Gentleman, I welcome the Bill. From some little experience of


the nationalised fuel industries, I can say with confidence that in them all research and development is at a very high level, technically and otherwise. I am confident that the Coal Board, if given the opportunity the Bill gives it, can add much to the pioneering work now being undertaken in the North Sea.
I am also glad that my right hon. Friend is showing some signs of removing some of the legislative chains that have been placed around the nationalised industries, and I will therefore touch on the point made by the hon. Gentleman about the fuel and power industries being divided functionally by the nationalisation. That is true, but most of those Acts were passed in the period 1945–50, and there is bound to be change and evolution in the industry with new technical methods and technological developments. It is quite natural, with technological changes and advances and with one process going out and new processes coming, that the organisation of nationalised industry like the organisation of private industry must adjust itself.

Mr. Corfield: If that is so, and if that is the purpose of the Bill, the hon. Member must admit that the Minister's argument might have been directed to the point that it could be better done by the Coal Board than by the gas industry, and he did not.

Mr. Palmer: The hon. Gentleman is suggesting that this job could well be done by the gas industry. I do not know whether he is in favour of the gas industry doing it—he did not say so—but that does not invalidate my point. There must be a division of function, but that division must change and develop from time to time. If there was weakness—and there were weaknesses—in the nationalisation Acts, it was that often no allowance was made in their structure for evolution and change. It is, therefore, all too common, when a change is essential for nationalised industry to ask Parliament for new legislative powers. It would have been far better if the nationalisation Acts had been much more broadly drawn so that, with the need for technical change, the organisation and interest of the industry could also be changed administratively.
I therefore feel that the Opposition's objection to the Bill on the grounds that it changes a division of function which

may have been relevant 20 years ago is, to say the least, doctrinaire. The hon. Gentleman was quite right to sense that I am in favour of the diversification of the activities of nationalised industry. Private industry makes its changes according to technical innovations and it necessarily follows that nationalised industry must do the same.
It is not unknown to the House that I am an electrical engineer, and have been brought up to look on the gas industry with somewhat mixed feelings, as is traditional among electrical people. But we must all agree that the progress of that industry in recent years has been remarkable. It has been able to win its way to prosperity almost by pulling itself up by its bootstraps, but because that industry is now forging ahead, and sells manufactured gas—a point with which I hope the Parliamentary Secretary will deal—it does not necessarily mean that it should have monopoly rights in the exploitation and distribution of natural gas.
The industry must obviously have its share and in the nature of things it will probably have the lion's share, but it does not follow that because the gas industry is selling household gas and gas to industry that it will all the time be the only right industry to handle the wholesale or retail disposal of natural gas.

Sir G. Nabarro: Why not? Will the hon. Member forgive me——

Mr. Palmer: Yes. I shall forgive the hon. Member and allow him to say a lot of things in a few moments. Natural gas, like coal, oil and nuclear fission, is a source of primary energy. It should be available to all the fuel and power industries of the country and not confined to one particular channel.

Sir G. Nabarro: Of course the gas industry is in an unique position. The gas industry, through its boards, has to supervise, for reasons of safety, the installation of all gas appliances. It would be technically impossible for two bodies competing with one another to distribute gas supplies—coal gas on the one hand and gas derived, after processing, from the North Sea on the other hand. That is why it is desirable for the Gas Council and the gas boards to deal with this matter.

Mr. Palmer: If the hon. Member will bear with me a little longer, I think I shall cover the point he thinks he is making.

Sir G. Nabarro: The hon. Member had forgotten it.

Mr. Palmer: No, I have not forgotten it. In the discovery and exploitation of natural gas in the North Sea we are operating under a mixed system, a system where private industry and public industry can apply for licences and in this case a licence may be granted to the Coal Board. But I am a little doubtful whether private enterprise should be there at all but I will come to that in a moment.
Again I stress, and I hope the hon. Member for Worcestershire, South (Sir G. Nabarro) will listen to what I say, that there is no absolute reason why the Gas Council should have the monopoly distribution rights. It has them at the moment, but it is not necessarily correct that it should continue to have them.
In the electricity supply industry we have the almost comic situation that the Minister has sent the Electricity Council to ask its gas rival if it can please have some natural gas to burn in electricity power stations. This is a very curious position. Here is a new source of primary energy which the electricity industry wants to be made available to burn in the power stations. So that electrity consumers should have advantage from it. There is evidence to show that if we allow for the large conversion which the gas industry needs in order to make natural gas available to consumers, the electricity industry can make better immediate use of the natural gas than can the Gas Council.

Sir G. Nabarro: That is no argument at all. The oil companies supply oil to the electricity boards for burning in power stations. Why should the gas industry not also supply natural gas to the Electricity Council on American lines?

Mr. Palmer: That would not be a satisfactory arrangement, because both are retail distributors competing with one another. I ask the hon. Member to bear with me a little longer. I have been more patient with him than he deserves. Of course he is perfectly right to say that in the United States there is a great

deal of natural gas burned in power stations; also, in spite of the great development of natural gas in the United States, electricity has shown equally good progress. It has kept perfectly in proportion.
I argue that if we had a truly coordinated fuel policy, which the country needs——

Sir G. Nabarro: Hear hear.

Mr. Palmer: —and I am still hoping for great things from my right hon. Friend——

Sir G. Nabarro: The hon. Member will wait for a long time.

Mr. Palmer: —we should avoid some of the contradictions which are now arising and which I think the development of natural gas will aggravate rather than lessen.
A national fuel policy means different things to different people. Many people think that it means protecting their own favourite fuel, but to me a national fuel policy means that the Ministry should look at the energy-use pattern of the country as a whole and try to develop and adjust that pattern to the maximum national advantage. I do not think the Ministry will get it absolutely right at every stage. Of course it will not, but it should try to get it as right as possible. I have to say, and I say with some regret, that at the moment although there is opportunity for reform the fuel industries of the country are rather less co-ordinated than they were when the Government took office.

Sir G. Nabarro: Hear, hear. Worse every day.

Mr. Palmer: Some extraordinary things are happening in relation to natural gas. Not only has the Minister told the gas and electricity industries to fight it out between themselves over the use of natural gas, but the Treausry, I understand, has approved expenditure of some millions of pounds for capital development of British Petroleum in the natural gas field. The Treasury has quite an interest in the financial affairs of British Petroleum. As my right hon. Friend knows, B.P. is pioneering natural gas discovery in the North Sea so that it may ask the Gas Council the highest possible price for its sale to them.
We have the extraordinary situation in which the Treasury is making cash resources available, or approving the availability of cash resources, to British Petroleum so that British Petroleum can differ with the Gas Council about the price of natural gas for sale to the consumer. Until some of these contradictions are smoothed out by my right hon. Friend's Department, we cannot say that we are moving very fast towards anything like a co-ordinated fuel and power policy.
What is required is a Natural Gas Corporation, a publicly-owned body which would make itself responsible generally for the resale of natural gas to all fuel users, whether the manufactured gas industry, the electricity supply industry, or private industry. It is not the kind of solution, I appreciate, which is likely to make much of an appeal to right hon. Gentlemen opposite, because it means virtually the nationalisation of natural gas, and eventually it would lead to the elimination of private interests there altogether. I would not object to that. I was a little disappointed that my right hon. Friend said earlier that this was a risky field for public enterprise, that public enterprise had not the financial resources provided all over the world that the oil companies have; that public enterprise is all right in relation to things that are established, but when it comes to pioneering work it is not so good.

Mr. Marsh: Since my hon. Friend is quoting me, I should like to correct him. My argument was not in line with what he has been saying. It was that for anybody, private or public, to engage in oil exploration in one narrow field is a highly dangerous and risky business commercially. Whether private or public, one must be able to deal with the risk throughout the world.

Mr. Palmer: I think we can all at least see the possible strength of that argument. Nevertheless, the development of nuclear energy in this country, was also a highly risky business yet it was public enterprise which through the Atomic Energy Authority and the Central Electricity Generating Board brought the country right ahead of the rest of the world.
It does not necessarily follow that because a new technique is risky and

financially speculative public enterprise cannot successfully innovate. As the years pass we may find that we are not getting as a nation the full benefits from natural gas exploration and exploitation of the North Sea. We may find instead that, because of our caution and timidity, we have brought in private enterprise quite unnecessarily.
I suggest that we could have a new Natural Gas Corporation which would be a wholesaler to the fuel industries and which would employ private companies as contractors, in the same way as the National Coal Board, electricity authorities, and gas authorities employ private companies as contractors; but the beneficial ownership and the financial advantage would come directly to the nation rather than passing through the intermediary of private enterprise.
I much welcome the Bill. It is a step forward. It gives the Coal Board an opportunity which the Coal Board deserves and it injects a measure of public enterprise into the field of natural gas. However, I would urge my right hon. Friend to be bolder and reverse some of the policies which were initiated in the first place by hon. Gentlemen on the other side of the House when they were sitting on the Government benches. I should like to see, in the matter of fuel and power policy, a break with bipartisanship. I should like to see us making our own policies. Let us remember that fuel and power is a sector in which public enterprise has been outstandingly successful. I am sure that what we have already done for coal and what we have done for electricity, what we have done for manufactured gas, what we are proposing to do now for the steel industry, all within the span of my right hon. Friend's Ministry, could equally be done, if we had the will, for natural gas.

5.35 p.m.

Mr. John Peyton: As I understand the main argument which we are concerned with in the Bill, it is whether or not the Coal Board should be involved in the operations in the North Sea. After I have dealt briefly with the speech of the hon. Member for Bristol, Central (Mr. Palmer), I shall return to that argument.
The hon. Member fired in the direction of my hon. Friend, the Member for Gloucestershire, South (Mr. Corfield)


some pompously acid remarks and then conducted a private argument with the hon. Member for Worcestershire, South (Sir G. Nabarro), which, of course, he lost. He then allowed himself to go to that happy hunting ground of every electrical engineer, of damning the gas industry. They really do love this. Any antipathy which is alleged to come from hon. Members on this side of the House against nationalised industries is as nothing compared with the bitter hatred with which these electricians regard the gas industry. The hon. Member wishes to rub them out of existence. Decency forbade him from unveiling the full extent of his malice towards the gas industry, but he was trying to prosecute the argument of his colleagues in the electrical industry for a really good lion's share of North Sea gas—which, I might add, I am not sure they ought to have. However, I do not wish to follow him in that argument at this moment.
The hon. Member went off on an impassioned plea for a fuel policy. I pay tribute to the Minister and to the Colonial Secretary who is having such an unhappy time in Gibraltar at the moment. They have been very very brave in this. They have denied everything they said before and they have not yielded themselves to the temptation of producing a fuel policy which would be out-of-date before the ink was dry on the paper, and which would probably have been written—and this is not the worst thing that could be said about it—at the dictation of the Chairman of the National Coal Board.
Another inhibition, which the hon. Gentleman is perhaps not aware of, upon the Minister in formulating a fuel policy is that he is wasting the time of Standing Committee D in nationalising the steel industry, and taking his eye off these important problems.
When the Parliamentary Secretary winds up the debate I hope he will give the House his plans regarding the Committee stage of the Bill. Am I right in assuming that it will be taken on the Floor of the House? If it is not, it seems to me that the congestion which will face the right hon. Gentleman and his hon. Friends will be something very terrible indeed.
I should like to come now to the right hon. Gentleman's speech. He is developing a certain skill at alleging the unlikely.

He said blandly that the Bill was a non-controversial one, when it is very far from being so. Had it been possible for this Bill to have been a non-controversial one, the right hon. Gentleman dashed those early hopes on the head by the inadequacy of his own arguments. He appears to be pushing this Bill through. There is no question of it being a non-controversial Measure.
His speech reminded me of the urgent need that there is for some kind of policy statement. I do not mean a detailed fuel policy, which to my mind is almost impossible, but we must have a policy statement in the fairly near future giving the Government's views on some of the really important problems which are arising from the North Sea project. I should like to know the right hon. Gentleman's views on whether or not the North Sea gas should be purchased by the Gas Council on a cost-plus basis. It sounds fine to make that suggestion, but I think it is wholly unworkable and impracticable. I am looking forward to an early opportunity of listening to the right hon. Gentleman expounding his views on the very difficult problems involved.
So back to the Bill. I believe that it is a bad Bill. It is also obscure. We do not know, and we are certainly not at all clear from what the Minister said today, what the Bill entitles the Coal Board to do. We look forward to probing this in detail in Committee, though our optimism and our experience do not lead us to believe that all our questions will be satisfactorily answered. Nevertheless, we shall press on.
The Bill is also very badly timed. It comes before the House on the very day that the Coal Board has hoisted the white flag in surrender to Luddite influences of Bevercotes Colliery. I have a great deal of sympathy with coalminers. I do not think that anybody should forget that theirs is a life apart, that they face immense dangers in their everyday work, and that their livelihoods are earned in a way different from that in which those of the rest of us are earned. They are entitled to, but do not always receive, a wide measure of public understanding.
That having been said, I repeat what I said not long ago in the House, namely, that, if the coal industry is to step into the fuel world of tomorrow, as opposed to lingering in that of yesterday, it must


establish working seven days a week round the clock. I am not for a moment suggesting that individual miners should have their hours lengthened or anything of that kind. I am merely saying that we cannot afford to have heavy investment in pits, not only at Bevercotes, but at many others, without those pits being worked so that we get the full use of the enormous capital investment that is put into them.

Mr. J. D. Concannon: How many times has the hon. Gentleman worked seven days a week?

Mr. McGuire: Would not that argument of full utilisation of expensive capital machinery apply, not only to the fuel industry, but to practically every other industry?

Mr. Peyton: Of course. This is exactly what happens in the steel industry, in oil refining, and in other industries. I am sure that the hon. Gentleman is as interested as I am in obtaining for the coal industry a sound and secure future. This is in the national interest. But he must face the fact that the coal industry cannot begin to compete, unless it uses its assets to the full.
I heard the hon. Member for Mansfield (Mr. Concannon) just now asking, from a seated position, how I would like to work seven days a week. I had just previously to that said that that is not what I am asking for. All I am asking for is that the very expensive machinery and equipment involved should be used round the clock for seven days a week. This does not involve a seven-day week for any one man. I should have thought that it was not necessary for me to explain that in detail but, in view of the hon. Gentleman's remarks, I have done so.
I believe that the morale of the coal industry is a matter of vital national concern. The electricity industry is, and to a large extent will be for a quarter of a century ahead, a hostage of the coal industry. If the morale of the industry should crack, if the industry is not seen to offer a reasonable livelihood and decent working conditions to men who are prepared to go underground, the country will suffer an industrial and economic disaster of major dimensions by being deprived of coal which is desperately

needed. It must be remembered always that the coal industry in its profitable, good areas must compete for labour resources with the industry of the Midlands, and that is not always easy.
One does not nag unduly, but at the moment the Coal Board cannot boast a very proud record. Production is not at all what it ought to be. Costs are high. Its markets are falling away. The future of coal in the economy is far from being assured.
In these circumstances I do not believe that the Board ought to divert one iota of its effort or energies from the business of its own industry—coal. Its business is to get coal and to look after the complex organisation which is required to do so. If we in the House were miners, what would our reactions be on being told that our employer, the only employer available to us, was now to interest himself in another business and was to go off and look for oil, a rival fuel? We would feel that at least the minds and energies of the Board were being applied in the wrong directions.

Mr. Palmer: This happens to vast numbers of employees when their employers decide to branch out in a new field of technology.

Mr. Peyton: It may be so, but not a direct rival of this kind. The Board has a very large monopoly in coal. At the moment it faces a considerable crisis. Within the last 12 months it has had to come to Parliament for an immense measure of financial assistance. In such circumstances it is wholly wrong that it should be permitted to divide its attentions and energies and go off in another and wholly new uncharted direction. I hope very much that before Parliament accepts the Bill we shall think again as to whether the investment which will be necessary is in any way justified.

Mr. Dalyell: The hon. Gentleman, having been a Minister at the Ministry of Power, will realise that one of the greatest problems facing the coal industry is a shortage of craftsmen in the pits. I represent an area where some pits may close in the next 10 to 15 years, and I know that it is very hard to recruit such craftsmen. If the Board could give some kind of undertaking that there would be training, for instance, for craftsmen in


the North Sea gas industry, this would have a good effect on recruiting, certainly in my area.

Mr. Peyton: The hon. Gentleman is entitled to his opinion. I do not doubt that there is some justification for what he says. The point I am concerned with is that the effect upon the morale and the confidence of miners when they see the Board setting off in a wholly different direction will not be good. Moreover, I believe that the problems now facing the coal industry are so vast, complicated and difficult that all the energies and abilities of the Board will be required if they are to be mastered.
If the Board is to be allowed to engage in North Sea drilling, why not also the electricity industry, which has at least as strong a claim? I am surprised that the hon. Member for Bristol, Central did not make this case. The electricity industry is bidding to be at any rate a user of North Sea gas. That being so, it has a much stronger claim to be allowed to engage in drilling.
Another complication which the Minister did not deal with, at any rate not adequately, is the attitude of the gas industry. Although the hon. Member for Bristol, Central expressed something of the views of the electricity industry, those of the gas industry have not been heard on this point. Is it intended that the Coal Board, having secured a quantity of North Sea gas, in company with some oil company, shall sell it to the Gas Council or shall sell it in competition with the Gas Council?

Mr. Lubbock: The Minister did say—I do not know whether the hon. Gentleman was in the Chamber—that the National Coal Board was bound by Section 9 of the Continental Shelf Act, 1964, which provides that it has to sell to the Gas Council unless it wants to use it itself for manufacture.

Mr. Peyton: I think that I did hear that, but the hon. Gentleman does not speak with quite the same authority as the Minister though he speaks with more clarity on this subject. I want to know what is the point of giving the coal industry power in the Bill to sell gas if it is intended that that power should be effectively limited under the Continental Shelf Act. I should very much

like this to be cleared up, because I suspect that this legislation bears some of the stamp of haste and lack of consideration which we have come to regard as a normal hall-mark of the legislative children of the present Administration. We know that the Coal Board has done some off-shore drilling, but I do not believe that it has any experience in submarine drilling to be put by the side of the oil companies. I shall be interested to hear if it has.
I end by repeating what I said before, namely, this is a bad Bill. It is ill-timed and obscure. I do not believe that the Government have put forward even a shadow of a case to justify the obviously large additional expenditure to which the country may be committed by granting it to an industry which has already had an enormous measure of subvention, nor do I believe that there is any justification for showing this great encouragement to the mining industry, but rather the reverse. I think that the reaction of miners—certainly it would be mine if I were one—would be that it would tend to take the eye of the industry right off the ball.

5.52 p.m.

Mr. Eric Ogden: I first declare an interest in the Bill as an ex-employee of the National Coal Board. I say this for two reasons. First, only those who have worked in the industry know not only the harsh conditions in it but the industrial efficiency of the Board's management. Those of us who have had to argue with the management from time to time for a halfpenny a ton know that it does not waste a halfpenny of the nation's money, and this is only one example.
My second reason for declaring my interest is that I wish to answer some of the points raised by the hon. Member for Yeovil (Mr. Peyton). The hon. Gentleman made a very effective speech, particularly if one happened to agree with his basic philosophy. But when he asks what will be the miners' views when they learn about this, as though it had been a deep dark secret that we are asking for powers for the Coal Board to go into North Sea gas, the answer is that that reaction is already on record. This move was welcomed by the National Union of Mineworkers at our national conference. We are in favour of diversification, and


do not see it as a threat to the basic industry of the National Coal Board.
Miners may from time to time welcome sympathy, but neither my colleagues in the House or in the coal fields ask for it. We are asking, and are entitled to ask, for understanding of the problems of the coalfields and that they should be treated in a realistic manner.

Mr. John H. Osborn: The hon. Member may have made a slip of the tongue in referring to "we". Was he referring to "we" as the N.U.M.?

Mr. Ogden: I think that I said "we" on a number of occasions. I think that the "we" to which the hon. Gentleman refers came when I said that we in the National Union of Mineworkers have no objection to the National Coal Board going into this new venture. We may have concern on details of how it will go in and why, but we have no objections on the principle, and this has been on record since the union's conference at Scarborough this year.
I welcome the Bill for two reasons. It is very short and my favourite word for speeches is "short". I shall try to be as brief as is the Bill. The hon. Member for Gloucestershire, South (Mr. Corfield) made the best of a bad case but gave away his main argument when he spoke of the basic differences in philosophy between the two sides of the House. When we talk about nationalised industries and the policy of nationalisation, they are against nationalisation in practice as well as in principle. We on this side of the House are in favour of nationalisation in principle and in practice but we do not make the corollary that because we are in favour of nationalisation we should therefore bar private enterprise. When one looks at the map of the North Sea one sees a Technicolor area of 25 private enterprise concerns and two public enterprises. The complaint of some of my hon. Friends is that we have not nationalised enough. We are not afraid of competition. Why should hon. Gentlemen opposite be afraid of it?

Mr. Ridley: Would the hon. Gentleman also agree with the Minister that there would be a case for allowing

private interests to enter into digging coal? They are not at present allowed to do so. If the hon. Gentleman would welcome competition, may we now have his agreement?

Mr. Ogden: As far as I know, no one from the private enterprise sector has suggested that they come back into coal mining. If it was a question of how much coal could be dug by hon. Gentlemen opposite compared with hon. Gentlemen on this side we would have no objection.
It is often overlooked that for many years there has been a large number of small private mines still in operation and still playing an effective part. No one has yet suggested it, but if Shell, Gulf or B.P. want to do it, let them put in their applications and they will be considered on their merits. On this basic question of competition we face the great divide. The Conservative manifesto says at page 4:
… our new policies for competition will inject fresh vitality into British industry, …
Why should they be so terrified of a slight amount of competition to private enterprise from the National Coal Board? After all, the energy market is large enough and it is expanding tremendously.
An estimate of coal equivalent in millions of tons shows that at present the National Coal Board provides 175 million tons of coal equivalent, and the total energy requirements of the country are roughly 300 million tons. It is anticipated that the total output of coal will continue more or less steadily at 175 million—it may go up to 200 million or down to 160 million—but the actual needs will grow. Therefore, while coal now has about 60 per cent. of the market, by the 1980s its percentage share of the market will be down to some 44 per cent., although total production will have remained about the same. Other fuels will be providing about 450 million tons of coal equivalent. There is no question of the country's energy needs shrinking. There is massive scope. Of the 25 concession companies, two are nationalised concerns. Apart from the Gas Council, the National Coal Board has some interest, in alliance with Allied Chemical and Gulf Oil.
Gulf Oil has concessions not only in the North Sea but also in the Irish Sea.


The Minister may be able to tell me whether the National Coal Board also has an interest in the Irish Sea concessions, which are at present let under licence to the Gulf Oil Company. There are five areas under Gulf Oil extending from South Barrow to off the Mersey Estuary. There is an obvious link here for the National Coal Board with its interests in the north-west, that vital part of the coalfields near one of the largest concentrations of industry and one of the greatest freight and passenger ports in the country. The link between the Irish Sea gas that I hope we shall have and the industrial conurbations seems obvious to me.
The geological structures which run across the Pennines seem to lend force to the case that, if there are coal, natural gas and oil on one side of the island, we should expect them on the other side, too. I sometimes think that not enough emphasis is being given to exploration in the Irish Sea as compared with exploration in the North Sea.
There have been references to the powers of the National Coal Board to engage in petroleum refining and distribution or the manufacture of petrochemicals. In recent years, there has been quite a large break-through in the extraction of petrol from coal. The National Coal Board has coal, and it has research facilities for the study and development of the extraction of petrol from coal. These are highly competitive processes. Why should there not be an expansion in this sphere?
The case we put is that the National Coal Board is as entitled as anyone to have the facilities and is as good as anyone to take part in this venture. It is the largest single employer of labour in the country, it operates on a national basis, and it has a national organisation. It has national training facilities and a national research organisation as well. It has national manufacturing plant and a national distribution organisation. No private enterprise concern in the country—or, at least, very few—could offer similar facilities.
The National Coal Board has the size, the plant, the capital, the basis, the technical knowledge in the fuel and power industry and the potential for diversification. Hon. Members opposite who referred

to diversification spoke in very qualified and strict terms of the kind of diversification they had in mind. But they practise it in their own private enterprises. Anyone with a copy of "Parliamentary Profiles" knows of the strange ways in which diversification works in their own enterprises. Why should they object when the National Coal Board wants to diversify?

Mr. Dalyell: Will my hon. Friend agree that training could perfectly easily be geared for certain types of craftsmen—in the company of so many of my mining hon. Friends I hesitate to specify which—on a dual basis both for the North Sea industries, which I know something about, and for the mining industry?

Mr. Ogden: Certainly, I agree. Not enough credit is given to the National Coal Board for the work it has done in training. The individual training facilities it gives equal at least the national Government's facilities in industrial training. Its research facilities, the way it has used day-release courses and the work of the mining colleges are as fine as anything in the world and much to be commended. The skill and facilities are available, and, as I say, not enough credit is given for them.
It has been said that the National Coal Board is not subject to the checks and controls of the market. I suspect that many National Coal Board people would like to return to the lack of checks and controls under private enterprise. Certainly, the scrutiny through the House of Commons of its activities is something which the Coal Board would like to avoid from time to time.
It is technical knowledge which the Coal Board has to offer to the two companies which have taken up the offer in gas exploration. The Coal Board has been drilling holes for a long time. Some of the holes have been very deep. Most of them have been on land, but by no means all. In July of this year, the Observer—this should have been available to hon. Members opposite—reported that:
The National Coal Board's sea boring tower has drilled 18 boreholes in the North Sea during the past eight years, each about 2,000 ft. deep and costing £69,000. Operations proved that at least 550 million tons of workable coal lie off the Durham coast, adding assets worth £2,500 million to Britain's natural resources".


The depth of exploration for oil and natural gas will be much greater than this, but the Coal Board has already drilled many times on land to equivalent depths such as it would require to drill under the sea. It is not quite the same thing, of course. No one suggests that it will be as easy to drill a hole of that depth at sea as it is on land but, given the organisation within the Coal Board such as I have tried to describe and its experience in drilling holes, including under the sea, it seems logical that the Board extend further and drill deeper. I should like to see the Coal Board extend its operations in that way with its own drillings.

Colonel C. G. Lancaster: I take it that the hon. Gentleman is not implying that the National Coal Board carried out the research for the North Sea. It did nothing of the kind.

Mr. Ogden: I intended no such suggestion, and I hope that I did not make it. I was saying that we have here an organisation on a national basis with the facilities I have described. One of its main jobs has been the drilling of holes into the earth's crust either on land or under the sea. Why should not the Coal Board go further out and deeper? It seems logical extension of present activities. I do not underestimate the difficulties of drilling at sea. It is one thing to drill on land or off-shore for coal and it is another to work further out to sea, but this, surely, is just a logical development on the Coal Board's work.
My hon. Friend the Member for Bristol, Central (Mr. Palmer) spoke of a national fuel policy. I suggest to my hon. Friend that the basis for arrangements to cover the nation's fuel and energy needs has been with us for quite a long time. The creation of separate boards for gas, coal, electricity and atomic energy may have been the best way of going about things at the time, but we ought now to look at the system afresh and consider whether it is an artificial and merely bookkeeping system. I do not suggest another national board to look after one source of fuel and energy, another Gas Council, so to speak, but why should not we have a national fuel and energy board or corporation? We could then get away from the stupid and rather misleading business of saying that a gas board has made a profit and the Coal Board has

made a loss. Of course, there would still be separate operating units and separate responsibilities—there would still be responsibility to Parliament—but it is time that we looked at the question within a wider context.

Mr. Peyton: The hon. Gentleman is now advancing a most dangerous doctrine. The possibilities for smokescreens in the accounts of the nationalised industries are endless, and they have been enormously exploited already by the National Coal Board. The result will be terrible if we squeeze the whole lot together.

Mr. Ogden: On the last occasion when we had a debate on this subject, the hon. Gentleman described me as an extinct volcano. If I am now, in his eyes, putting up a smokescreen of dangerous doctrine, I do not apologise for a moment. All I am asking is that the Minister should look into the question. The Government should consider whether it would be not only more efficient but more honest to have a national fuel and power board or corporation to operate within the framework which we have now.
I welcome the Bill. I shall give it every support in all its stages, and I hope that the House will do the same.

6.8 p.m.

Sir Gerald Nabarro: The hon. Member for Liverpool, West Derby (Mr. Ogden) ended by saying that he welcomed the Bill. My speech will be the antithesis of his I deplore the Bill. It is unnecessary. It is expensive. It is bad business. It is doctrinaire. It ought never to have been conceived and it will be opposed by my right hon. and hon. Friends and myself by every legitimate means at our disposal.

Mr. Peyton: A Guillotine?

Sir G. Nabarro: Did I hear my hon. Friend say "A Guillotine"? Not yet, I hope.
With the exception of 20 months' interregnum when I was not in the House, I have spoken in every coal debate since 1950. It is significant in this coal debate how few coal mining Members are sitting on the benches opposite. What a remarkable lack of competition there is within the Labour Party to speak on their sacred cow, the coal industry. In contradistinction, my hon. Friends and I are falling


over ourselves to speak about the coal industry, for we had to grapple with its hopelessly bad structure, with its insolvent finances and with its innumerable deficiencies throughout our 13 years of office, I summarise this in a few short sentences.
I am sorry that the Minister is not in his place. I hope that he will not accuse me—I quote him—of "blind prejudice" in what I am going to say about the National Coal Board. But I quote facts only from his own publications. First, one of his predecessors brought to the House the White Paper on the Finances of the Coal Industry, dated November, 1965, Cmnd. 2805. It is significant to quote from paragraph 2, dealing with the reconstruction of the National Coal Board's capital:
It was announced on 1st July that the Government proposed to write off about £400 million of the National Coal Board's debt. This decision was based on a recognition of the consequences of the contraction of the market for coal in recent years and the likelihood of further contraction.
Rubbish! Nothing of the kind! There was a cumulative loss of £400 million as a result of the mismanagement of the coal industry under an inadequate structure from the date of vesting in 1947 until 1965. It was the taxpayers' bill, the price of political nostrums on nationalisation which a majority of 200 Labour Members of this House foisted on an unsuspecting nation after the General Election of 1945.
So foolish were some of the electorate at that election that they even thought that, when coal was nationalised, they would get their household coal free of cost. So stupid were some of the electorate in 1945 that they thought when the railways were nationalised, they would travel on "puff-puff trains" without buying a ticket. [Interruption.] This is not my standard anti-nationalisation speech. I have quoted from the Socialist Government's White Paper. They wrote off £400 million.
Let us also look at manpower. A few years ago, in the early 1950s, the coal industry had 713,000 men; it now has just above 400,000. The industry is contracting fast. About 10 years ago, it was mining 223 million tons of coal, including a modicum of opencast but mostly deep mined. This has now dropped to 170 million tons and is still going down. This year it might be 175 million tons. It

depends on the labour market. As a result of unemployment in the West Midlands and elsewhere—I do not call it redeployment but prefer the homely term unemployment—men may be driven from the motor factories and soon back to the pits and that will lift output.
I quote also from the out-of-date but not disclaimed document, the National Plan, the source of my figures showing that the output of coal will go down to 170 million tons. Output goes down and prices continuously rise. In the last full year, the industry made a loss of £24·8 million and it is voracious of capital. If there is a second sacred cow to hon. Members opposite it is the word "investment". They seem to think that all investment is good investment. On the contrary, it is the quality of investment which matters, and the profitability, or the earned income from investment. These are the true arbiters—not a string of bald investment figures as in the case of all nationalised industries, with the Treasury providing the money, irrespective of the capability or the efficiency or the application of the investment. Even the Parliamentary Secretary recognises the respectability of that plea.

The Parliamentary Secretary to the Ministry of Power (Dr. Jeremy Bray): The Parliamentary Secretary to the Ministry of Power (Dr. Jeremy Bray)indicated assent.

Sir G. Nabarro: I am glad to see him nodding assent. Let us study the National Coal Board's investment. I will quote from one more of the Government's White Papers, called Public Expenditure, Planning and Control, issued in November, 1964, Cmnd. 2915. I have said that the Board is voracious. I will show how voracious. The White Paper said that, in 1964–65, the National Coal Board would call for £90 million; in 1965–66 for £90 million; in 1966–67 for £93 million; and by 1969–70, at 1965 values, for £85 million.
All of that money, I claim, should be devoted to the pits and on opencast sites to raise the productivity of the coal mining industry, which is the proper purpose of having the National Coal Board if one accepts the nostrum of nationalisation at all. It is a misguided purpose, in my judgment, to apply that capital to questing for oil in the North Sea. That is no part of the terms of reference or the purpose of the National Coal Board.
No doubt hon. Members oppposite will seek to argue that the money applied to North Sea activities for gas and oil is nothing to do with the N.C.B. investment to which I have referred but I draw their attention to the Explanatory Memorandum of the Bill, paragraph 3 of which states:
Any borrowings required by the National Coal Board in the exercise of these powers will be governed by the Coal Industry Act 1965 and may be borrowed from the Exchequer, subject to the overall limit on all the Board's borrowings in the 1965 Act not being exceeded. The limit on overall borrowings in the 1965 Act is £700 million, which may be increased to £750 million by an Order made by the Minister and approved by the House of Commons.
It is therefore evident that every £1 million diverted by the Board to questing for oil in the North Sea is to be deducted from the sums of money available for the legitimate deep mining and opencast coal mining purposes.

Dr. Bray: I am sorry to interrupt the hon. Gentleman but this is not the case. He would surely agree that, where there is scope for profitable investment by public enterprise, the money should be found to carry out that investment. My right hon. Friend said that there would be no cut-back in investment by the National Coal Board in order to leave scope for the North Sea exploration.

Sir G. Nabarro: I did not say that there would be. The hon. Gentleman has not been listening. I repeat that any money diverted to questing for oil in the North Sea will have to come out of moneys of the Board within the Provisions of paragraph 3 of the Explanatory Memorandum of, the Bill. Any money going to North Sea quests will lead to the Board's coming back to this House for renewal of its power to borrow, or to increase its power to borrow, at an earlier date than otherwise would be necessary.

Dr. Bray: Dr. Bray indicated dissent.

Sir G. Nabarro: It is no good the hon. Gentleman shaking his head. I must be right about this. What is more, I am right about it. There cannot be any reasonable doubt about it.
It is my fundamental objection that seeking oil is no part of the Board's busi-

ness. I respect the hon. Member for West Derby as an ex-employee of the Board but, as an outsider looking in, I am much more perspicacious in my financial assessments of the Board's affairs. He is, to use a hackneyed term, a retained servant of the industry. He speaks for the miners.

Mr. McGuire: Why should he not?

Sir G. Nabarro: There is no reason why not, but I am a much less prejudiced person than he is.

Mr. Peyton: Will my hon. Friend delve into his considerable commercial knowledge? Unfortunately, he was not with us when we passed the 1965 Act and we are glad that he is back. May I ask him what would happen to a private enterprise concern that borrowed vast sums of money for one purpose and then used them for another?

Sir G. Nabarro: Of course it might well be in Queer Street, but most private enterprise companies have the yardstick of profitability and unless they earn reasonable profits, they are out of business in a very short time. That is not so with the Coal Board. It goes on with what I call the accumulation of losses year after year, and waits for the day when the Labour Party is returned to power so that its coal-mining lobby can go to Westminster and write off the accumulated losses, "Bob's your uncle, we will get rid of them in the stroke of the pen", which is exactly what has happened.

Mr. Ogden: The hon. Gentleman seems to assume that those of us who have worked in the industry have some great love for it, as though the Coal Board was some sort of father-figure. It is rather the opposite. Once one has worked for the Coal Board, one hates its guts. One can only do that.

Mr. Speaker: This is most interesting, but we are on the Second Reading of a Bill with very definite powers and we must keep to the Bill.

Sir G. Nabarro: I am deeply grateful to you, Mr. Speaker. I always endeavour when we are debating a Coal Bill to display my lively interest in the affairs of colliers and the pits. I have a very real affection for all those who work in the pits doing a hazardous, dirty, arduous


and unpleasant job. What I am talking about is the coal industry and how to make it pay, and I do not believe that it will be made to pay by taking money out of it to quest for oil in the North Sea.
As the Minister said, there are about 4,500 square miles in the North Sea which are being explored for oil and 25 groups and consortia available for this huge operation. They are doing rather well. They are doing much better than the National Plan, published 15 months ago, envisaged that they would. The National Plan postulated that there would be only a modest result from these activities, but in the short space of 12 months very large reserves of gas have been discovered and, even more important, oil deposits have been located both under land and sea, all of which transforms Britain's economic prospects during the next few years.
My objection to the Bill and the reason why I shall go into the Lobby against it with such alacrity is simple. I say why devote public money to the speculative enterprise of questing for oil in the North Sea when there is already abundant capital available from all of the 25 private enterprise oil companies and their consortia to do this very thing? The Minister made no pretence of answering that question. The hon. Member for West Derby, who casts such covetous eyes on behalf of these magnificent discoveries, says that we should let the Coal Board jump on the band-wagon and participate in the profits. This has nothing to do with the Coal Board's activities. You might as well ask, Mr. Speaker, why not let British European Airways make an investment in North Sea gas and oil exploration. It would be just about as sensible.
Companies succeed in the harsh field of commercial competition when they specialise and concentrate on the activities for which they have the expertise, the knowledge, the training and the staff. The Coal Board has none of these things and is never likely to have any of these things. The hon. Member for Midlothian (Mr. Eadie) made a ridiculous intervention——

Mr. Dalyell: West Lothian.

Sir G. Nabarro: He asked why the Coal Board should not put its research facilities on to oil. That was nonsense. The Coal Board's researches are not necessarily applicable to this highly specialised activity of exploring for oil and natural gas. Did I misquote the hon. Gentleman?

Mr. Dalyell: The hon. Gentleman is confused and is attributing to me the remarks of one of my hon. Friends. I was dealing with training and on the limited subject of training the hon. Mem for Yeovil (Mr. Peyton) thought that the suggestion was fairly sensible.

Sir G. Nabarro: That was not the interpretation which I put upon it, but if the hon. Gentleman wants an example of misplaced and expensive researching he has only to go to the consequences of the Clean Air Act, 1956. That was passed through the House with unanimous acclaim in all quarters of the House, but its success rested on one fundamental, namely the National Coal Board producing adequate supplies of solid, smokeless fuel. Stoke Orchard Research Station of the National Coal Board has been working on this problem for ten years. More than seven years ago it announced its "Bronowski bullets." They are not yet on the market in adequate quantities. Solid smokeless fuel is enormously expensive. Tens of millions of pounds have been poured into this form of research and it has largely been a failure. Yet hon. Members opposite want the Coal Board to go into the oil business about which it knows absolutely nothing.
I conclude by returning to the intervention of the hon. Member for Midlothian. He talked about the miners resolving at their conference how keen they were to get into oil. It is not the miners but the Labour Party which is seeking to get into oil. Hon. Gentlemen opposite cannot nationalise the oil companies.

Mr. Emrys Hughes: Why not?

Sir G. Nabarro: The hon. Gentleman once again displays his abysmal ignorance of industrial matters. Hon. Gentlemen opposite cannot nationalise the oil companies, because all the oil companies are international concerns and are owned in many countries. But the Labour Party


wants to nationalise North Sea gas. [HON. MEMBERS: "Hear, hear."] I am getting some confirmation from the benches opposite.
I did not use my Press ticket this year to go to the Labour Party Conference. Next year I will consider doing that, so that I can hear some of these nostrums expounded at close quarters and report my views on them. At the Labour Party Conference this year, Mr. Sidney Ford, President of the National Union of Mine-workers, moved a resolution for the National Executive Committee of the Labour Party to examine and report on the public ownership of North Sea gas, as a part of our indigenous fuel resources. That resolution was unanimously carried. Today the Minister of Power is obediently carrying out the dictates of his financial masters.
This Bill is as bad as Clause 2 of the Iron and Steel Bill which gives the new Corporation almost unlimited powers over a very wide range of miscellaneous British industry, to convert private firms into public ownership. This Bill is the epitome of the creeping paralysis of nationalisation. For that reason I oppose it, but with none of the blind prejudice of which the Minister so wrongly accused my hon. Friends and myself earlier this afternoon.

6.30 p.m.

Mr. Alex Eadie: I shall not be able to use all of the words in favour of public ownership which were used by the hon. Member for Worcestershire, South (Sir G. Nabarro) in his opposition to nationalisation. I wish to intimate why I shall be supporting the Government in this Measure. The hon. Member for Worcestershire, South said that he did not have a Press card for the Labour Party Conference this year and sought, to some extent, to misconstrue my intervention. He did not have a Press card for the Mineworker's Conference either, since I was there and did not see him.
In my intervention, I said that miners were often accused of having a Luddite philosophy; that they were restrictionist in their outlook. I pointed out that at their conference the miners welcomed the find of natural gas but, quite reasonably, questioned why it should be left to

private enterprise to exploit the bonanzas arising from this discovery. Quite properly, the miners said that they felt that the nation should have some share in this.
The Opposition have used this debate as an opportunity to attack nationalisation and public ownership. They ought to have said so at the outset and not made the miners the target for their attack. It has been argued that the National Coal Board and the miners have failed the nation and, because of their inefficiency, should not be allowed to participate in the explorations taking place in the North Sea. If the rest of the country had achieved the same rise in productivity as the miners have done, then there would not be an economic crisis of the size that we are now suffering from.
As a former miner, I resent the implications that have been made by the Opposition. They have inferred that the industrial relations of the Board are not what they should be as a consequence of the Bevercotes dispute. Does the hon. Gentleman who made this accusation know when there last was a national strike in the mining industry? The miners' industrial relations system is the envy of this country and an example to all of how industrial relations and conciliation machinery should operate.
I hope that the next time hon. Gentlemen take part in a debate of this nature and wish to attack the miners and the National Coal Board they will do their homework and find out the facts, and not try to deceive people by making such unfounded attacks.

Mr. Ridley: Would the hon. Gentleman say to whom he is referring and whom he alleges has attacked the miners and the National Coal Board, because I am not quite clear?

Mr. Eadie: It was the spokesman from the Front Bench. I asked if he would give way when he referred to Bevercotes and industrial relations.

Sir J. Eden: I should make it quite clear that my hon. Friend the Member for Gloucestershire, South (Mr. Corfield), in his reference to Bevercotes, clearly deplored the fact that this valuable investment was not operating to its fullest capacity. This was the aspect


to which he referred. He made no overt or covert attack upon the men engaged in the industry.

Mr. Eadie: I have listened to the whole of this debate. The record will prove what I am saying. I am sorry to have to say that that is not the impression that I received, and I imagine that it was not the impression received by some of my hon. Friends.

Mr. Concannon: I am sure that it was the hon. Gentleman the Member for Yeovil (Mr. Peyton) who made this assertion.

Mr. Lubbock: I made a note of what the hon. Member for Yeovil (Mr. Peyton) said. He spoke of the National Coal Board having hoisted the white flag of surrender to Luddite influences at Bever-cotes.

Mr. Eadie: I may have to apologise to the hon. Gentleman the Member for Gloucestershire, South (Mr. Corfield), but it was said during the debate. Another point related to the fitness of the National Coal Board to operate its machinery. It was said that an organisation should be able to obtain the fullest possible utilisation of machinery. Hon. Members opposite are showing an appalling ignorance of the workings of the mining industry, because at present there is full utilisation of most machines in the industry.
In my own area, we are working machines throughout the shifts, for 18 to 20 hours a day. This fully refutes any accusation that the Coal Board is incompetent and cannot utilise its machinery fully. It may be argued that we have not had full utilisation of machinery at Bevercotes, but it was implied that this was typical of the National Coal Board's approach to mechanisation.

Sir Douglas Glover: I understand—and this might help the hon. Member—that the trouble about Bevercotes is that the workers who would work there are prepared to work on the seven-day system which the Coal Board wants but that the area management of the union is not prepared to agree to this.

Mr. Speaker: We cannot discuss this case in detail. We are debating the Second Reading of a Bill.

Mr. Eadie: The hon. Gentleman has just come in and cannot know what has transpired.
We have been talking about the fitness of the Coal Board to participate in exploration. There has been talk about the Coal Board selling gas. But the Board already sells gas to industry. It therefore has some experience in the sale of gas and is fit to participate in exploration. There has been talk about boring. It is well known that the Coal Board had boring rigs in the sea. For many years people in the County of Fife where I live have know for some considerable time that the Coal Board was boring very deeply on the Forth.
The inference has been made that the Coal Board is so inefficient that if we allow it to participate in this operation it will be very bad for the nation and the Coal Board. I do not know what standards of efficiency some hon. Members opposite apply. We talk about the cost of the production of coal and the finances of the Coal Board. But I point out to hon. Members who want to compare private enterprise and public enterprise that the miners resent the fact that it costs more to distribute coal than to produce coal, and this under private enterprise.

Mr. Speaker: That may or may not be true, but it is outwith the scope of the debate.

Sir G. Nabarro: Nationalised railways.

Mr. Eadie: I know that the hon. Member for Worcestershire, South objects to the fact that I should point out some of the inefficiencies of private enterprise.
When we talk about finance and the financial operations of the Board, it is well for hon. Members opposite to remember that when the mines were nationalised and the compensation terms were agreed the miners believed that there was an over-generous allocation of compensation.

Mr. Speaker: Order. I am sorry to interrupt the hon. Gentleman again, but we cannot discuss the history of the nationalisation of the coal industry. This is a Bill about a specific object, as the hon. Gentleman knows.

Mr. Eadie: I must accept your Ruling, Mr. Speaker, but there has been discussion about the finances and losses of the Coal Board. My point is that the reason for the state of the balance sheet is that compensation was paid to coal owners in


the belief that the pits would have a long life. But the expectancy of long life did not materialise and the pits had to be closed. But the private owners got their compensation.
I am thinking of the New Rothes colliery in Fife where compensation was paid on the basis of expected profits. This was a project started by private enterprise. From the day that the pit started not a penny profit was made. The pit lost quite a considerable amount of money—millions in fact. But the owners received their money on the basis of expected profits. I cannot develop this argument because, as you have pointed out, Mr. Speaker, I should be out of order. It ill behoves hon. Members opposite to talk about the finance of the Coal Board. We could run rings round them if they wanted to examine the finances of the Coal Board.
I hope that hon. Members will go into the Division Lobby in support of the Government on this Bill.

6.47 p.m.

Mr. Michael Alison: I thought that the hon. Member for Midlothian (Mr. Eadie) was a little wild in the accusations which he levelled at the Opposition in respect of alleged attacks on the miners. However, I should like to reassure him that the opposition which I feel to the Bill has nothing to do with the miners. The real problem which we are facing is concerned not so much with the miners but with management.
The hon. Member for Midlothian was right to focus attention on some of the financial operations and activities and records of the Coal Board. This I believe is the issue with which we have to come to grips. There has been a lot of irrelevant talk today on the broad philosophy of whether we are right to oppose alleged competition between private enterprise and a nationalised industry and whether the National Union of Mine-workers, as the hon. Member for Liverpool, West Derby (Mr. Ogden) suggested, was right to talk about wanting to enter the promised land of natural gas.
This is a sort of cloud-cuckoo-land. It reminds me of the days when the Government of Ghana, under Dr. Nkrumah, debated whether Ghana should have a steel industry. It was a lovely

idea. But the question was: could they afford it? Can the Coal Board, desirable though it may be to go into natural gas, afford in terms of hard cash, a speculative project, as the Minister said, prospect and undertaking? I wish to address myself to that question.
We have been fortunate in the last six or nine months in having quite a lot of detailed information on the finances of the coal industry. My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) has already referred at some length to an important White Paper on this matter called The Finances of the Coal Industry. It is the facts contained in this which gives rise to the misgivings about the whole of this venture.
The Financial Memorandum to the Bill refers to the borrowing limit for the National Coal Board up to 1971. The financial limit for borrowing, we understand, is £700 million to be increased by order to £750 million—that is, a limit on borrowing of £750 million up to 1971. five years ahead.
I would remind the House that, out of that figure of £750 million which is the limit up to 1971, there is already a sum of £545 million eaten up in the form of reconstructed debt. What the Coal Board can borrow between now and 1971, even if it comes to this House by Order, is £750 million, less the £545 million reconstructed debt already eaten up, leaving a total borrowing scope, according to the provisions of the Financial Memorandum, of £200 million odd between now and 1971. There is the £155 million without Order, and then the extra £50 million, bringing it up to £205 million odd, if they get the Order from this House. That is £200 million which the Coal Board have powers now to borrow in the next five years.
I wish to draw the attention of the House to the extent to which that has already been committed in advance to undertakings which are entirely separate from these speculative enterprises, undertakings and commitments in respect of North Sea gas. Since they both referred to the borowing aspects, let the Minister and the Parliamentary Secretary remind themselves for a moment of paragraph 18 of the White Paper and the extent to which these sums are already committed. We have £75 million set aside


already for ancillary activities, other than North Sea exploration, such as the Bronowski bullet to which reference has already been made is part of that. I will come to that in a moment, if I may. Then there is provision for possible deficits, and that gives us £30 million for the years 1965 to 1971. In the first year, £25 million has been taken out of that because of the deficit this year. Then there are various other items, such as contingencies, and borrowings to allow for seasonal movements in working capital. The fact is that before we get anywhere near the speculative £6 million, the whole of the borrowing powers have already been absorbed.
One of the features which disturb us is that the Minister has come to the House asking us to rewrite a far-reaching and basic reorganisation of the coal industry's finances which were undertaken partly as a result of the White Paper and the Coal Industry Act, as recently as November 1965. Apparently this idea has only just floated through. It has only just occurred to them. Apparently it was not even considered when we discussed the revised borrowing powers under the Coal Industry Act.
In the £200 million-odd available between now and 1971, there is no room for all the activities which the Board has to undertake, or the ancillary activities, provision for possible deficit, the floating debt, etc.
In a short intervention, the Parliamentary Secretary made a quite reasonable point. He said that if it is possible to find an opening for investment which promises to be profitable, why not accept the principle of raising the money even if it becomes necessary to exceed the borrowing powers, and invest in the hope of a profitable return. That is where we feel anxiety, because it is in the field of diversification that the Board has already gone so far astray. Let the Government remind themselves of some of the problems that they face in the very field of diversification to which substantial capital sums are committed already.
Here I would make special reference to the whole question of smokeless fuel. That is something which is crucial and central to the future prospects of the coal industry. The provision for developing smokeless fuels is one of those specific items which are already meant to be

covered by the limit on borrowing powers mentioned in the Memorandum. The £200 million-odd which we have in hand has to bear the burden of the "Bronowski bullet" and the whole of the diversification in what are called ancillary activities. Smokeless fuel is a key priority in this sector which is immeasurably more important than exploration for natural gas by the Coal Board.
Everyone knows that there will be a severe decrease in the consumption of coal by the Central Electricity Generating Board. That is one way in which the use of coal will be diminished. We know that the steel industry has increased its fuel productivity enormously, so that it will be using less coal.
One promising opening for the coal industry is smokeless fuel for domestic appliances, which are becoming increasingly important as smoke control zones extend over the country. It is in that area that the Coal Board have made a hopeless botch of things. It is no exaggeration to say that the smokeless fuel to which my hon. Friend the Member for Worcestershire, South has already referred—the "Bronowski bullet"—has been a scandalous performance. How the National Coal Board can seriously come to the House and ask us to support projects for going into natural gas when it cannot even make solid smokeless fuel, let alone gaseous smokeless fuel, is an insult to the House.
We must remind ourselves of the history of the "Bronowski bullet"——

Mr. Speaker: We must not pursue the "Bronowski bullet" in detail on this Bill. The hon. Gentleman must link what he has to say to the argument about the Bill itself.

Mr. Alison: In that case, Mr. Speaker, I shall have to refer to it in outline, if not in detail.
This sector of diversification into new activities includes diversification into smokeless fuel. Here the story is a terrible tale of mismanagement and failure to operate a productive plant after exploring the process in a pilot plant.
It is not without significance that the Chairman of the National Coal Board, Lord Robens, told the Select Committee on Nationalised Industries at the end of last year that smokeless fuel, and particularly this "Homefire" brand from


the Coventry plant, would be being produced at the rate of 650,000 tons, and he said that it would be produced at that rate in the year 1965. After some cross-examination by the members of the Select Committee, he agreed that it might be five or six months later before the smokeless fuel began to be turned out of the "Homefire" plant at Coventry in any quantity.
Having regard to the fact that five or six months takes one from the end of December to about the end of the Coal Board's financial year, 1965–66, I had a look at its Annual Report. There, it says:
At the end of the year, the large new commercial plant at Coventry for the production of 'Homefire' was being prepared for commissioning.
That was at the end of March, 1966. My information is that at the present time, nearly twelve months after Lord Robens told the Select Committee that "Homefire "would be produced at the rate of 65,000 tons a year, the Coal Board is just managing to squeeze 400 tons a week out of a plant which was designed at a cost of £10 million, and as part of an investment which is to stretch up into the region of £40 or £50 million, after six years of alleged research at Birch Coppice on a pilot plant.
That is scandalously hopeless and inadequate. How can the Coal Board seriously come here and ask us to raise money at the rate of £6 million, £7 million or even £10 million for the exploration of natural gas, when it cannot even produce solid fuel out of its own researches, and expect us to feel any confidence in its idea of going into North Sea gas?
That is how we view it, not on philosophical grounds of competition with private enterprise, but purely on the basis of the incompetence of the Coal Board in managing its own proper sector and its failure to turn to a profit the existing capital with which the nation has already supplied it.
When one looks at the record of the Coal Board in existing diversification plans—"Homefire" is an example—and then one considers that Lord Robens has told us that he wants to develop Immingham as a deep-water port, is it on the cards that that can be done within the available £200 million between now and 1971? When one looks at Bever-

cotes and all the other sectors which are properly within the Coal Board's purview of operation, is the enormous capital outlay that would be involved in the provision of a deep berth at Immingham for shipping coal to the Continent on the cards? Now we have natural gas, Is it really possible to believe that it will come within the terms of the Financial Memorandum, pressing up in this the first year against the limit set for 1971?

Mr. David Marquand: The hon. Gentleman has been talking about the inefficiency of the Coal Board. Can he explain why, if the Board is so incredibly inefficient, so manifestly unsuited to engage in this activity, private companies are so anxious to co-operate with it?

Mr. Alison: One reason is that the Minister is asking us to fork out 6 million honest golden sovereigns per annum to go into the kitty. This is a very tempting bait. There is not need to argue this on philosophical or general grounds. The truth is that there is not enough money in the kitty for the Coal Board to do this, or there should not be. It cannot profitably manage its existing investments.
We feel that the real reason why the Coal Board has gone into the natural gas business is that it wants to be with it. It wants to try to restore morale. I agree that the coal industry has had a lot of hard knocks, and Lord Robens was right when he referred to morale as a key factor in the future of the coal industry.
This industry had its target systematically reduced by the encroachment of the oil and gas industries. This is, of course, demoralising, and if the Board can hitch its wagon to the new rising star of gas, this may be desirable, but it is not a good enough reason for doing so. There must be solid financial reasons for such a move. The Board should learn from the gas industry, which for many years was its client. It became browned off with its status, and it is now enjoying its independence.
The Coal Board has a promising future if it concentrates on operations which are properly its own, and not attempt to get with it, by getting into a sector about which it knows nothing. It should concentrate on developing its own investments, particularly in smokeless fuels.

7.2 p.m.

Mr. David Marquand: I had not intended to intervene in this debate, but I have been so astonished by some of the arguments advanced from the benches opposite that I feel bound to intervene shortly.
I believed, in my innocence, when I became a Member of this House, that the party opposite stood for the principles of capitalism and private enterprise. However, during this debate I have found that the argument is not between a modern view of capitalism on the one hand, and deep-dyed doctrinaire Socialism on the other. The kind of philosophy which is being propounded from the benches opposite during this debate is a Neanderthal concept of capitalism, which has nothing in common with the sort of mixed economy which exists all over the Western world. The logic upon which the opposition to this Bill is based is as follows: First, the Opposition seem to be asserting that nationalised industries must never engage in growth sectors of the economy. Nationalised industries must never be profitable. They do not say that in so many words but this is implicit in many of the arguments which have been advanced.
Another vein running through the argument is that nationalised industries should not compete with private enterprise, that there is something wrong, unfair, and wicked about the fact that nationalised industries should dare to come forward and compete with private enterprise.

Sir G. Nabarro: That is entirely false. For 13 years between 1951 and 1964 Conservative Governments conscientiously and deliberately left 20 per cent. of the long distance road haulage industry publicly owned and nationalised, and 80 per cent. in the private sector to compete with it. The reason for that was to provide competition, and nothing else.

Mr. Marquand: I am glad to hear that, but if that holds good for road haulage, I do not see why it does not hold good for the North Sea. Hon. Gentlemen opposite cannot have it both ways. I am not saying that all hon. Gentlemen opposite think that the nationalised industries should not compete with private enterprise, but I am saying that this is one of the threads running through the speeches to which I have listened.
The third, and I think the main, reason why hon. Gentlemen opposite are opposed to the Bill is that they allege that there is something uniquely bad about the Coal Board, that it is somehow uniquely unsuitable for the Board to intervene in the North Sea project because of its bad record in various ways. They allege that the Board's record in labour relations is particularly bad, and that this disqualifies it from entering into this project.
The hon. Member for Worcestershire, South (Sir G. Nabarro) dilated at great length on the great losses which had been made by the Board, and appeared to suggest that this in some ways disqualified it from entering into this field. I should like to make two brief pertinent points on what he said.
During the last nine or ten years the number of men employed in the mining industry has declined from about 700,000 to about 400,000. No other major industry can point to a similar contraction, and this has been achieved without any major industrial dispute. It has been achieved with great skill, great humanity, great care, and sensitive co-operation between the Board and the N.U.M. It is idiotic and completely unjustified to suggest that the Board has a bad record of labour relations. The fact is that it has a superlatively good one, and if private enterprise had a record anything like as good, the state of the British economy would have been a good deal healthier than it has been for the last 15 years.
I propose to deal now with the more important point—the allegation that the losses made by the Board in some way disqualify it from entering into this business. It is not possible or sensible to run an energy policy solely in terms of short-term profitability. All kinds of other considerations must come into it. Strategic considerations must come in, so must social considerations. These are bound to weigh in the balance a good deal. It is a difficult and delicate job to say how much they should weigh in the balance as against pure profit in a book-keeping sense.
Rightly or wrongly, successive Governments have given the Coal Board a social task to fulfil. This has prevented it from behaving as private industry would behave in similar circumstances. It has prevented the Board from making the profits which it would have made if


it did not have to fulfil social tasks. If, in the early 'fifties, the coal industry had been operated according to the criteria adopted by private enterprise industry, it could have charged enormously high prices for coal. It would have been very profitable indeed, but, because of social and economic considerations, in my view quite rightly applied by the Government at that time, it was not able to do so. This is why it was not profitable in those years.
The situation is somewhat different now. As a result of Government policy the Board is having to maintain a large number of uneconomic pits, uneconomic in the short-term sense, partly for social reasons, and partly because for strategic and political reasons it would be wrong to run down the coal industry below the 170 million ton figure. This means that the Board is having to bear an unprofitable burden. It is necessary and right that it should, but it is then quite absurd for hon. Members to beat the Board over the head because it is "losing money". Of course it is losing money. It is right and necessary that it should be losing money in this sense, at certain times in its history—not always, but at certain periods. It is not the Board's fault that it does this.
The final reason for objecting to the N.C.B.'s entry into the North Sea gas arrangement, upon which the hon. Member for Gloucestershire, South (Mr. Corfield) seemed to spend a great deal of time, was diversification. He said that it was wrong for my hon. Friends to cheer diversification as though it were a sort of tin god. I agree. I do not think that diversification is good in itself. But by the same token it is rather ridiculous to object in principle to the idea that a nationalised industry should engage in diversification in the way that the Board has done and, if the Bill is passed, will do in this new field as well.
If the Board were a private company, faced with the problems and difficulties that it faces as a nationalised industry, it would be diversifying its activities at this moment. This would be the common sense thing to do. I agree that the diversification investment which the Board makes has to be made on extremely tough, hard-headed and unsentimental economic grounds. The National Board

for Prices and Incomes in its report some months ago on coal prices suggested that when the Board made investment plans in the diversification field it should aim at a return on capital of about 20 per cent. It said that that figure could not be applied in all circumstances but that the assumptions must be solid, hard, clear, tough and unsentimental economic assumptions. That is entirely right. To object to diversification when the Board seeks to take part in the North Sea gas projects on the principle that it is wrong for nationalised industry to do this is simply doctrinaire prejudice.

Mr. Corfield: Mr. Corfield indicated dissent.

Mr. Marquand: I am glad that the hon. Member for Gloucestershire, South, disagrees.

Mr. Corfield: If the hon. Member will do me the courtesy of reading the report of my speech he will see that I did not say that it was wrong as such. I argued that it was bringing the Board into unfair competition with private enterprise.

Mr. Marquand: When private companies compete with each other it is fair competition, but when a nationalised industry competes with private companies it is, for some miraculous reason, unfair. We might pose the riddle: when is competition unfair? When it is done by public enterprise, owned by our people, with the result that benefits will accrue to the people instead of to a narrow section of shareholders. This is an extravagant definition of the word "fair".
I said that I did not want to make a long intervention; I will conclude by saying that we have listened to an extraordinary farrago of ideological prejudice in the course of the debate. In the final moments before I resume my seat I want to make one other point. The Board, in becoming involved in the North Sea gas project, will bring nearer the day when we have one overall board or corporation to deal with fuel policy. In the short time I have had a direct connection with a mining constituency I have been led to the conclusion that if the present situation continues the danger that we shall have to face is the danger not of too much coal but of too little.
We are now having in the mining industry a massive drain of manpower from the pits. This has been brought about


largely because of the shocks to morale caused, first, by competition with oil and more recently by the rather exaggerated stories that have gone around about the bonanza to be found in the North Sea.

Sir D. Glover: If I am fortunate enough to catch Mr. Speaker's eye I shall not speak ideologically, but I would point out that it is because of my regard for morale in the coal industry that I do not want the Board to go into North Sea exploration, because of the effect that this will have on the miners. They will be apprehensive of the future of hewing coal if the Board sees a future in gas.

Mr. Marquand: As the hon. Member for Midlothian (Mr. Eadie) pointed out, the mine workers at their conference this summer said that they welcomed the discovery of North Sea gas and, further, that they thought that this should not be left to private enterprise. On both legs of that argument it seems quite clear that, far from causing the morale of the mine workers to suffer, the news that the coal industry was becoming involved in this field should lead to an improvement in the morale of the mineworkers.
Unless we have a comprehensive fuel policy which will define the place of gas, coal and oil for a long time ahead we shall face a crisis of confidence in the mining industry which will be extremely damaging to the economy of this country, not least on balance of payments grounds. Therefore, if we are to have a comprehensive national fuel policy it is logical that we ought to have a comprehensive national board covering all the fuel industries. I hope that the move of the Board into the North Sea project will be a step in this direction. I commend this possibility to my hon. Friend. It is an additional reason why I hope the Bill receives a crushing majority in the Lobbies tonight.

7.16 p.m.

Colonel C. G. Lancaster: I apologise to the House for not having been present for the opening part of the debate, for reasons with which I know the Parliamentary Secretary will sympathise. I must take up the debate without having heard the earlier speeches. The hon. Member for Ashfield (Mr. Marquand) seemed to think that all my hon. Friends were opposed to diversification on principle. I can assure him that

some of us are not. We may be opposed to the practical effects of diversification in certain directions but we do not oppose it in principle.
I can tell the hon. Member that in the days when I was concerned with the coal industry we were often tempted to try our hands at other things, but, if we were wise, on the whole we did not do so. I can give all sorts of examples of projects that we thought about, such as maintenance shops, which have now been set up. We discovered that in the long run we could not operate them as effectively as the manufacturers of machinery, and we dropped them. We became interested in the manufacture and installation of appliances—boilers and the like—but on the whole we found that it was not wise to do this. In my experience, the coal industry did only two sensible things in this direction. It was necessary that it should farm the land adjoining pits, for a number of reasons which I know that hon. Members interested in the industry will recognise. It was seldom done profitably. It was only to avoid the problems of subsidence and tip fires which were otherwise likely to arise. Coal owners often went in for land sales. That was a quite reasonable thing to do. It was in their interests and the interests of the consumer. But to go beyond that was not very wise. Coal owners, as the Coal Board has done, occasionally became interested in research. If they were wise, they dropped it. It was a highly specialised type of industry. Why I and other people are opposed to the Bill is because, at this moment, it is intended to go into this very highly specialised field.
I must declare an interest in this matter. Ever since nationalisation, I have been interested in geology. I belong to the firm which has done all the North Sea explorations for the Coal Board, so I know something about that subject. It was a very technical job, but it had nothing like the speculative nature of the present proposal. The geological survey told us that there were coal seams both in the Forth and down the East Coast of Sunderland and Durham, and it was only a question of proving the actual quality and quantity of the coal there.
This was undertaken over a period of 12 years—three years in the Forth and


nine years in the North Sea. It is some satisfaction to say that every bore proved to be satisfactory and we discovered about 2,500 million tons of additional reserves. However, this was done not by the Coal Board—it was not competent to do it, nor would it claim to be—but by a firm which specialised in that work.
The Coal Board could take a real interest because not only were its people geologically fairly experienced, but it was a type of job which they understood. They knew something about the strata because it was not all that different in the North Sea from what it was on land. They knew about the coal when it was eventually found, but they never claimed that they should do the research, and wisely they did not undertake it.
Now, however, the Board is anticipating going into something far more involved. It is taking on something which the Minister said is speculative. He was right to say so. I returned two days ago from the Trucial States, where oil is being produced in greater quantities than probably anywhere else in the world. It may surprise hon. Members to know that, even in that area, where there is an abundance of oil, a great deal of it not very deep, only one bore in ten comes off. Research is immensely speculative and very expensive.
Now we are moving into the North Sea with these intentions. Up to date, the results in the North Sea have been highly satisfactory. As against the statistics of one bore hole in 10, one in four has turned out to be successful. I have talked to the oil industry about this and when I spoke this morning to two or three of the biggest people operating in the North Sea, they told me that they did not expect that this rate of success could continue. They may be wrong, but they are, after all, people with vast experience. That means, in effect, that the Coal Board will, at this stage, go into an undertaking which has a very large element of speculation and risk capital.
I wonder whether we are justified in saying that we are prepared to undertake a matter which involves such an element of risk capital. I do not want to go back over the failures of the Coal Board. It has had successes and failures and on the

whole its failures have occurred when it has attempted to do things which it is not necessarily equipped to do very well. Hon. Members have talked about Bronowski bullets or the Lurgi process or the Collins Miner, in which it experimented, but which it was not well equipped to do. Some things it can do, but it was not equipped to do that.
To go into the North Sea and start exploration for gas or oil is highly speculative. The only result is that it will be a sleeping partner with whatever concern it goes in with. It will not undertake this itself. It is not fitted for it. It has not the geological knowledge. It has never done this type of research.
We had an example in the last Parliament when, on behalf of the Gas Council, the Minister asked us to agree to a fairly simple Bill about the storage of gas. That involved a good deal of geological knowledge, which the Gas Council did not have, yet it asked that the Bill be brought before the House. Of course, the Bill is abortive. It will never be put into effect and the Council has had to acknowledge that the proper means of storage of gas is quite different from the one which it suggested in that Bill——

Mr. Palmer: Why does the hon. Gentleman think then, if this is so risky, that so many oil companies, both British and foreign, are apparently anxious to take these risks? Surely they have great knowledge and they must feel that there is "something in it". I therefore cannot follow the hon. Gentleman's argument about the risk.

Colonel Lancaster: I did not say that. Naturally, the oil companies want to take their chance in exploring the new field which may have gas, or oil, or both. They have large accumulated reserves, with which they can do it and an abundance of experience in that type of research. What I am saying is that there is nothing wrong in diversification as such, but what I claim to be altogether wrong is for the Coal Board to attempt to enter a field in which it has not the specialised knowledge. If it does so enter, it can hope to do it only in combination with existing oil companies and it will be only a sleeping partner. It will not do the research: it has not the knowledge, technique or experience. That means that the House of Commons is being asked to


vote money to enable the Board to be a sleeping partner in a type of research in which they would be the first to admit that it has not the knowledge or experience or technique and that therefore the element of speculation should be the greater.
It is a very large speculation for the oil companies but it would be a far larger one for the National Coal Board or anybody else to go in with an oil company, knowing that they could not contribute to the research, that that must be done by another party and that they will have to put their capital into that——

Mr. McGuire: Before the hon. Gentleman leaves that point about development, although he did not use the word "spectacular", he did mention the failures of the Board in research. Who would he think should have shouldered the responsibility, as the Coal Board did, of developing the smokeless fuel, seeing that that was a charge laid upon the Board by the Government in the Clean Air Act? Who would be better qualified to have carried out that research?

Colonel Lancaster: In its thinking about smokeless fuel, I believe that the Coal Board was wrong in its primary approach. If the hon. Member wants me to get down to technicalities, I would say that the actual approach of the work of Birch Coppice from which Coventry developed and which originated at Stoke Orchard was from a chemical aspect. If it had been approached from the aspect of project engineering there were companies capable of doing this type of work which might have been successful. I never thought that Birch Coppice would come off and it failed for technical reasons.
I do not say that the Coal Board was not entitled to produce smokeless fuel, but in that particular aspect it would have been much wiser to employ people who were expert in that matter and it might have got some results. It tried to do it itself and it failed. It is no use to take on techniques of which one has no experience and the technique of research in oil and natural gas is so specialised and is one for which the Coal Board has never claimed to have either the knowledge or the experience.
The only result is that it would go in as a sleeping partner with some oil companies, perhaps one or two or perhaps

only one. It would not only be an element of speculation which the oil company would have to take on but, being a sleeping partner, it could in no sense affect what was happening.
As a result, the House is now being asked to provide—as it would have to provide in due course—money to the Coal Board to take part in an endeavour to find natural gas or oil in the North Sea. Possibly it might be successful and possibly it might be completely unsuccessful and at that moment we would have voted additional money for something which the Board is not capable of doing itself.
This is not a wise thing to do. I hope that more oil and gas will be found—that will redound to the interests of this country if the oil people find it. If, in due course, the Gas Council is sufficiently geologically versed to find it, well and good, but do not ask me or anyone else with experience of geology to say that it is wise at this moment for us to vote moneys so that the Coal Board can take part in something of this highly speculative nature.
I do not believe that the proposal is sound, and I for one, and, I believe, all my right hon. and hon. Friends, are opposed to it for these practical reasons. We are not opposed to the principle of diversification—diversification is often good—but diversification into a sphere in which the Board has no real technical knowledge, of which it has not the experience, and which, in any case, is highly speculative, must be wrong. For that reason, my hon. and right hon. Friends and myself will vote against the Bill.

7.32 p.m.

Mr. Michael McGuire: Like every hon. Member on this side who has spoken today, I welcome the Bill. Hon. Members opposite, while talking about natural gas, have generated a lot of natural gas in trying to prove that this new public enterprise is absolutely divorced from the proper function of the National Coal Board. That is not so. A pamphlet produced by an oil company, referring to getting a licence to drill for this North Sea gas, says in paragraph 7, page 6:
Two conditions established by the Government when inviting applications for licences are of special interest. Account was taken of each applicant's contribution, actual or


potential, to the country's fuel economy. And particular attention was paid to applicants' abilities and resources …
It is the Board's duty to meet the major part of the nation's need for fuel and power, and the Board has very successfully discharged that duty. Paragraph 7 of the pamphlet lays down some of the criteria to be applied when these licences are granted, and the Board is prudently protecting its own and the nation's interests. This is a growing and a profitable field. Why should not the Board engage in an enterprise that will be profitable but will not carry any of the dangers associated with deep-mined coal?
The Board's record in securing the nation's maximum fuel requirement at any one time has been one of spectacular success, and the attitude of the men in the industry towards this new development, as outlined by my hon. Friends the Members for Liverpool, West Derby (Mr. Ogden) and for Midlothian (Mr. Eadie), has been very enlightened. To refer to a phrase that has been bandied about in this debate, the men are not looking at this development with a Luddite eye. They realise that vast changes are taking place in the production of energy. Hon. Members opposite say that to engage in this work is outside the province of the original intentions of the 1946 Nationalisation Act. I should like to ask them this question. If the situation then had been what it is now, does any of them think that the Board would have been restricted exclusively to deep-mined coal, and would not have been allowed to widen its base in its own and the nation's interest? There is no doubt about the answer. The Board is acting very wisely and sensibly.
Much play has been made of the Board's finances, and its terrific and appalling losses. The hon. Member for Worcestershire, South (Sir G. Nabarro) dwelt on that aspect probably more than anyone else. Paragraph 3 in page 4 of the Board's Report shows that its carried-forward debt was almost the total accumulated deficit that was forced on it in the nation's interest by the importation of foreign coal. The sum of £90 million represents a loss of £79 million, plus the accumulated interest, which the Board has carried forward for more than 15 years. No other industry has been forced

to carry such a burden. There is no parallel in the private sector of forcing on to an industry a loss that was not its own in the first place.
The fact is that at that time the Board was just getting into its stride in developing and increasing production. The nation needed more coal than the Board could then provide or had planned for, so the industry was saddled with this debt mainly because the coal produced in Britain was cheaper than the imported coal. The debt is not a reflection of the Board's inefficiency but rather of its efficiency. The trouble was that the Board had not got into its stride, private enterprise had left it with a very poor record of coal production, and the nation needed more coal than the Board could then provide. That is the history of that £90 million.
The Board's written-off capital of £450 million, of which a good deal of play has also been made, came about quite naturally because successive Governments, both Labour and Tory, had compelled the Board—when natural gas and oil were well out of the question—to plan for a target of about 253 million tons. Miner M.P.s will well remember the acclaim we gave to the plan of Dr. Idris Jones which would have meant that we would now have had a maximum production of about 260 million tons. The Board had already been saddled with a large debt for which it was not responsible and it had planned under the direction of Tory Governments as well as Labour, so let no one say that bad management was the trouble. The Board was doing the job that Governments had told it to do, and the necessary capital investment withered away because of the finding of new sources of fuel.
People think that the Board has a monopoly, and can tell any industry what amount of coal it will have. The Board cannot do that. Production is now down to 175 million tons compared with a planned 260 million tons. The gas industry takes from the Coal Board between 9 million and 10 million tons less than was planned for. It is a record of contraction largely because a Tory Government was in power for 13 years, and it was the Government of the hon. Member for Gloucestershire, South (Mr. Corfield). I do not know what the hon. Member


did then, but with the benefit now of hindsight he will probably say that he told them they were wrong.
The Board was saddled with a debt of about £79 million which accumulated with interest charges to £84 million or £85 million—a most unfortunate debt which the Board could not be expected to discharge but which had been foisted on it. But the Board has taken on other quite justifiable debts. I refer to the subsidence costs it has to meet annually. This is largely a legacy of the bad mining days. That is not to say that subsidence does not occur now under good mining practice, but it is now more controlled. It is allowed for and planned for by methods of total caving as against the old method of pack extraction which created more problems that now have to be faced. The Board was rightly saddled with that debt. I am not advocating that it should not have to pay, and that people finding their houses crumbling about their ears should have no one to resort to. I believe that is a very proper legacy which the Coal Board is carrying.

Mr. Speaker: Order. I hesitate to interrupt the hon. Member, but he must link what he is saying with the Bill.

Mr. McGuire: I accept your Ruling, Mr. Speaker. I only add that many of these points about the finances of the Board were introduced by hon. Members opposite and if I have erred it has been in trying to put them on a proper footing.
The point was made that the Coal Board should not go into this new venture because private companies are not allowed to go into the production of coal. I remind hon. Members that prior to 1947 all the coal of this country was provided by private enterprise. The hon. and gallant Member for South Fylde (Colonel Lancaster) was a coal owner. I am not saying that he was a bad coal owner, but no one can dispute that the history of privately-owned participation in the British coalfields has a record written in blood, sweat, tears, toil and man's inhumanity to man. If anyone were foolish enough seriously to advocate as the solution for some of the problems of the Coal Board, which is sticking to its own midden, that of allowing private enterprise to come into the industry, my friends who have worked in the mines, especially those who work in

the pits now, would soon give the answer. Private enterprise failed lamentably in coal production——

Mr. Speaker: The hon. Member must come to the Bill.

Mr. McGuire: One of the best reasons why the Coal Board should go into this new venture is not only that it should broaden its base like any good company—and very prudently it is doing that—but that it would be one of the best guarantees for the nation, for the price to the nation will be very reasonable. There will be great price stability. The Coal Board's price record is magnificent, one which I believe has not been equalled by any company, private or otherwise. For four and a half years it has held pithead prices stable. Part of the accumulated loss of £24 million it now has is directly attributable to the fact that our Government prevented the Board from increasing the price of coal and it had to incur this loss. If it had been allowed to put up that price it would have been so much the better off. This is one of the main reasons why the Coal Board is rightly getting into the new energy fields and rightly broadening its base. This will be in the best interests of the nation and of the Coal Board, and I therefore welcome the Bill.

7.44 p.m.

Mr. Eric Lubbock: We have gone over a lot of ancient history this evening. Much has been said which does not appear to bear directly on the Bill. I do not think the shortcomings of the private owners in the pre-nationalisation period ought to affect our consideration of this Bill. I would rather look at it from the point of view of the public interest in 1966.

Sir D. Glover: Hear, hear.

Mr. Lubbock: I think the hon. Member should not have said "Hear, hear", because he will disagree with the rest of my speech. In the public interest the Bill should be supported for a reason which has not been mentioned today. That is, that the exploitation of natural gas in the North Sea should go ahead as rapidly as possible in the interest of a cheapest possible fuel policy for the benefit of consumers, commercial, industrial and residential. The Minister will recall that I have been quite critical of him


in the past for his cautiousness and timidity in making forecasts of the scale in which natural gas will become available. I was grateful to him for the few pieces of information he gave this afternoon, although I cannot say that I was at all excited by them.
I think the use of 13 million tons of coal equivalent by 1970 is a very small target. I hope it will be exceeded by at least 100 per cent. and that the investment by the National Coal Board will help to accelerate this development and bring it on as rapidly as possible. That is my main reason for supporting the Bill. The money involved is very small. If I may get out of the way one point made earlier, I think by the hon. Member for Worcestershire, South (Sir G. Nabarro), he said he was afraid that the National Coal Board would exceed its borrowing powers of £700 million at a much earlier date than otherwise it would have done. Then the Coal Board would have to come to Parliament and ask for legislation to increase the limit of its borrowing powers thus unnecessarily taking up the time of the House. The Minister said that only £6½ million would be invested by the Coal Board in this enterprise. [Interruption.] I am sorry if I misheard him.

Mr. Marsh: In order to put the record right, I should point out that the £6 million would be provided over a period of years purely for exploration.

Mr. Lubbock: That is an absolute fleabite in comparison with the total borrowing powers of the Board of £700 million which can be increased by Order to £750 million. It is neither here nor there and the money is to be spent over a period of years. There is not much to get excited about there. The hon. Member for Worcestershire, South was on a bad point if this was one of his main reasons for opposing the Bill.
Apart from one remark made by the hon. Member for Gloucestershire, South (Mr. Corfield), there seems no principle dividing the two sides of the House. He said that we were dealing with the fundamental political philosophies which divide the House but that has been denied by every one of his hon. Friends who have spoken in the debate since. They have said that they have no objection in principle to public participa-

tion in North Sea exploration. How could they, when they have not objected to the Gas Council participating in one of the groups—and participating successfully—in the North Sea exploration?
The argument that public enterprise should not be involved was not put forward seriously except by the hon. Member for Gloucestershire, South. Hon. Members in the Opposition have had to turn attention to the National Coal Board in particular and think of reasons why, while it is quite satisfactory for the Gas Council to participate, there are reasons why the National Coal Board should not participate. They spoke first about diversification, but I shall read a small statement of an Act the name of which I shall mention after I have read it. It says:
Subject to the limit in subsection (3) of this section, each of the Boards may borrow … for acquiring an undertaking or part of an undertaking … for subscribing for or acquiring securities of a body corporate, otherwise than by way of investment …
That sounds like the most dangerous Socialism, but the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) on the Opposition back benches has identified it correctly. It is from the Transport Act, 1962. I cannot see why, if the Tory Party accepts the principle of diversification as it did in Acts passed under its régime——

Mr. J. H. Osborn: I thank the hon. Member for giving way. I do not think he was in the House at that time, but I may be wrong. Those of us on the Standing Committee were exceedingly uneasy about the powers which a Conservative Minister was then taking.

Mr. Lubbock: As a matter of fact, I was in the House at that time. I even took part in the Second Reading debate on the Transport Act, 1962. My memory may not be as good as that of the hon. Gentleman, but I cannot remember, in the Second Reading debate, any howls of anguish being raised from the Conservative benches. The hon. Member may be quite right in saying that it was touched on in Committee, but I was not on that Committee.
I return to the suitability of the Coal Board to embark on an enterprise of this kind. I have an interesting quotation to read to the House. I was nervous that another Member might find it before me.


The quotation is from a speech of the hon. Member for Yeovil (Mr. Peyton).
… the Board is now branching out …
I should like hon. Members to pay attention to this quotation—
… and I commend it on its enterprise in doing so—for, example, into the exploration for natural gas in the North Sea in co-operation with the Gulf Oil Company of America, and the Allied Oil Company of America."—[OFFICIAL REPORT, 2nd December, 1965; Vol. 721, c. 1656.]
I am astonished that the hon. Member for Yeovil should this afternoon say precisely the opposite. I know that the Tories say one thing in one place and another thing in another place, but for them to say different things in the same place within a period of one year is going too far. I am sorry to be nasty to the hon. Member for Yeovil in his absence, because he was unusually polite to me this evening when I intervened—I might almost say unprecedentedly polite. However, I think he should read his previous speeches before speaking on a subject like this, and should carefully ensure that he says the same thing on successive occasions.
There does not seem to be any validity in the argument of the Conservatives that the National Coal Board should not engage in this enterprise, while it is perfectly all right for the Gas Council to do so.

Mr. Alison: I am a little uneasy about the borrowing power limit, which is the crucial point of the hon. Gentleman's argument. He has not appreciated that of the £750 million, very nearly £600 million has been used, and the rest has been set aside for other enterprises which the Board is engaged in.

Mr. Lubbock: I have left the borrowing powers limit argument. I was saying that the amount which the Minister expected would be spent by the National Coal Board of between £6 million and £6½ million over a period of years, was extremely small in relation to the borrowing powers of the Board and in relation to the scope and potential of North Sea gas, where I should like to have seen much more spent.
I had left that point and was dealing with the question of the fitness of the National Coal Board to engage in operations of this kind, whether it should be allowed to diversify on something which

hon. Members have claimed is outside its field of expertise.
May I refer to the speech of the hon. and gallant Member for South Fylde (Colonel Lancaster), who used to be a coal owner, and who said he had been engaged in contracting drilling operations on behalf of the National Coal Board? He said it did not have the expertise to do the sort of operation which oil companies were doing further out. None of those groups which is engaged in prospecting in the North Sea does the drilling. The hon. and gallant Gentleman, if he is so expert in the Middle East and the North Sea and other areas where oil is being sought, should be the first to appreciate that. If hon. Members could go on one of those drilling platforms in the North Sea, as I did recently, they would be told that the platform was operated by a company which specialises in drilling operations. There are very few people on the staff of the prospecting group living on the platform while the drilling operations are going on. There is a geologist, and there may be one or two other highly qualified technical staff who are there permanently, but nearly all the people who are engaged in the actual drilling operations themselves are not members of the prospecting firms but of a special contractor who is engaged for the operation.
If the National Coal Board were to go in with Gulf Oil or any other firm drilling in the North Sea, this is exactly what it would do. It would engage a company like the hon. and gallant Gentleman's which has skill in drilling holes in relatively deep water, and it would not be necessary for the Board to acquire the expertise of actual drilling. This, again, is not a good argument.
I intervened during the course of the Minister's speech to point out that some of the other firms at present engaged in North Sea drilling operations might equally be claimed not to have this expertise. There is Rio Tinto, which is an extremely famous mining company. As far as I am aware, this company has never undertaken any drilling operations for gas or oil in deep waters. There is also I.C.I., whose expertise is again not in this field. I did not notice that hon. Members objected to either Rio Tinto or I.C.I. participating in these operations.


I think the hon. Member for Worcestershire, South has just said they would make good money.

Sir G. Nabarro: I did not say that. I said that Rio Tinto, I.C.I. and the remainder do not use public moneys voted by this House for that purpose, and that it was therefore an entirely different consideration.

Mr. Lubbock: But they are hoping to make a great deal more money as a result of their operations in the North Sea. That is the point. The hon. Member cannot have it both ways. They say that those companies that are drilling in the North Sea are doing well and making nice profits, and that the Board is engaged in an operation which is diminishing, because the demand for coal is running down. They say, "We are not going to let them embark on something which might prove profitable for them and which will help the Board restore its fortunes." That is an attitude which hon Members on the Conservative benches have adopted towards the Bill, and is one that I do not like. I think it is quite legitimate for the National Coal Board to embark on diversification operations to restore its fortunes and prosperity.
One Conservative Member—I cannot recall who it was—said that Lord Robens was quite right when he said that morale was a key factor in the Coal Board. I endorse that view. Nothing could restore the morale of the Board more than putting its operations on a highly profitable basis. I was talking recently to an employee of B.O.A.C and I was told that it made a fantastic difference to the morale of the Corporation when it did well and when it beat the Americans in the North Atlantic with its VC10s. If we can put the Board on a really profitable basis, people will want to become miners. Lord Robens will then have the people he needs for the profitable pits. This would assist the operations of the Board as well as restoring the whole of the industry into making profitable earnings.

Sir D. Glover: I am grateful to the hon. Member for giving way. I cannot see how this is going to improve the condition of the individual miner. Simply because the Board is making money out of the North Sea operations, it will not recruit more miners or increase production of coal. If anything, it will reduce it.

Mr. Lubbock: No. People always want to join a successful enterprise. They do not want to join something that is running down and losing money. If the hon. Gentleman gives it a moment's thought, he will appreciate that. Is a young man starting on his career more likely to go into the coal mines or the gas industry? He sees that the gas industry is expanding and that the coal industry is not, and therefore if the money is quite good in the coal mines compared with that in the gas industry, he is likely to look at the relative security of the two enterprises and is much more likely, I would suggest, to choose gas than coal at the present time.
The hon. Member for Bristol, Central (Mr. Palmer) raised a point which was pursued in more detail by the hon. Member for Liverpool, West Derby (Mr. Ogden). That was the need for a national fuel policy. The hon. Member for West Derby followed this by querying whether it was necessary to have separate boards in charge of the gas industry, the electricity industry, the coal industry, and so on. I was extremely interested to hear the hon. Gentleman make this point, because I raised this question in an article I wrote in The Guardian on 26th June, which perhaps the Minister saw.

Mr. Marsh: The hon. Gentleman sent me a copy of it.

Mr. Lubbock: I think I did that at the time. I asked whether the separation of these industries into different compartments was conducive to the efficiency of the whole operation. Today's debate has made me think that I was correct in asking that question, because so much of the argument has centred on the different responsibilities of the Gas Council and the National Coal Board and whether one should be entirely responsible for the North Sea operation or whether both should have a share in it.

This question would not have arisen if we had had a national energy board in charge of all these operations, with a number of subsidiaries separately responsible for each of them and with area energy boards—here I go a little further than the hon. Member for West Derby—in charge of selling the products of the national energy board to consumers.

Competition between the gas and electricity boards has been harmful to the


consumer rather than the reverse. This applies on a national and on a local scale. It may be that we are coming to an era when thought could be given to this question by the Government. Perhaps the Minister would care to touch on it in winding up, as it has been raised by many hon. Members. [An HON. MEMBER: "It would be out of order."] I do not think it would be. I think that it would be in order, since so many hon. Members have dealt with the difference in responsibility between the Gas Council and the National Coal Board. So at least the Minister could go so far as to say something about that, even if he could not bring in the question of the electricity boards as well.

For the reasons I have given, and particularly because I think that it is important to set about the expansion of our prospecting operations in the North Sea and to bring North Sea gas into the homes of consumers and into factories as rapidly as possible, I recommend my right hon. and hon. Friends to support the Bill.

8.3 p.m.

Mr. Edwin Wainwright: I apologise to the House for not being present when the debate began, but I was elsewhere doing some useful work. When on entering the Chamber I heard some hon. Members expressing their opinion as to why the National Coal Board should not explore for gas in the North Sea, I decided that I would participate in the debate. Even if the Board were £1,000 million in the black, the Tory Party would still oppose this small Bill. I expected the Bill to go through on the nod.
No one who believes that it is essential that the nation should have control of its power supplies for the benefit of the community as a whole would object to a small Bill such as this. Some of us have long memories about what happened to the mining industry under private enterprise. It was so unsuccessful, it brought in its wake so much misery, and its financial circumstances were so straitened, that it was a good thing that the State took over the mines, for the sake of the country and of those who worked in and about them.
The Board now seeks to borrow £750 million, £6½ million of which is to be used

for boring in the North Sea. It is said that the Board is not entitled to do so. Criticism is levelled at the Board because, in the opinion of some hon. Members opposite, it has not been viable. We must ask why hon. Members opposite did not denationalise the mining industry when they were in power. They could not do so, because they knew that private enterprise could not run the mines. I am certain that private enterprise cannot run another industry which is now to be nationalised.
Hon. Members speak sneeringly of the use of public money, but it is to be used to obtain a source of power which is essential to the country as a whole. What about the public money being used in the private sector, the benefits of which go into the pockets of shareholders? Hon. Members opposite make no criticism about that. That can be allowed, so long as the Government will provide the money and so long as any profits that arise can go into the pockets of shareholders.
I was surprised to hear some statements by hon. Members opposite. I did not believe that people could make such statements against an industry which is better than any coalmining industry in the world, with the exception of the American mining industry, where entirely different conditions prevail because of the different geological circumstances.
If the Board is entitled to supply fuel to the nation at the dictates of the Government, the Government should be entitled to tell the Board that it can seek other sources of fuel which private enterprise is now seeking. I remind the House of what happened about the private sector of this industry under the Conservative Government and of the indecent haste with which the Tories gave permission for boring to take place under the North Sea just before they were defeated at the polls in 1964.

Mr. Patrick Jenkin: Does the hon. Gentleman seriously contend that, if the noble Lord, Lord Erroll of Hale, who was then Minister of Power, had not granted the licences in September 1964 but had taken the advice of the right hon. Member of Hamilton (Mr. Tom Fraser) and had delayed until after the election, we should now have been contemplating substantial supplies of natural gas coming ashore less than two years later?

Mr. Wainwright: The hon. Gentleman should have waited before intervening. Before the Bill went through Parliament the rigs were being towed out into the North Sea. The licences were issued at that time to ensure that a subsequent Administration would be debarred from issuing further licences to companies on behalf of the State because of the compensation which would have to be paid. That was the main reason why the Tory Government rushed it through. I remember that at that time it had already been proved that there were great sources of gas on the Continent, and some gentleman knew that there was a great probability of gas being found in the North Sea. I would have preferred the North Sea to be prospected on behalf of the nation and owned by it than that it should be prospected by companies many of which were formed with foreign money.

Mr. Patrick Jenkin: We should still be waiting for it to be done.

Mr. Wainwright: It would not have been waiting to be done. Hon. Members opposite always have the impression that anything run by and on behalf of the State must be a failure. But during 13 years of Tory rule there was never an attempt to denationalise the industries at present nationalised. I must not get out of order, but this is an important point, because the Tories' opposition makes us believe that it is like a red rag to them if anything is to work on behalf of the nation and not private enterprise. Undoubtedly they would not dare to denationalise them, because the nationalised industries are those that are used as public services, where it is more important that the community shall be served.
This applies to gas and electricity, and it also applied to coal, because until 1956 coal was in short supply here, and the Coal Board had to pay for the difference in the price of the coal that was imported. Would private enterprise have done that? No. It takes public money to benefit itself. A lot of money spent on research goes to the benefit of private enterprise, and right hon. and hon. Members opposite never express appreciation of this, because they are happy to receive the benefits that can be derived and to know that their friends on the Stock Exchange will derive some benefit.

[Interruption.] If the hon. Member wants to interrupt on taxation I would say something to him about taxation and also mention a new wealth tax, but I should be out of order. I apologise, Mr. Deputy Speaker, for even trying to stray upon that line.
It is true that labour relations within the Coal Board have not been as good as we should have liked, but they are far better than in any nation on the Continent. Labour relations here are better than in almost any other nation throughout the world. Let us not forget that the workmen are not always at fault in labour relations; many times the managerial side is at fault. It may be asked why labour relations should be brought into this, and said that the boring in the North Sea is far away from labour relations in the coal mining industry. It is obvious that every single point that could be seized upon by right hon. and hon. Gentlemen opposite has been used on this issue.
I hope that the Bill will go through easily. If it is said that it will result in unfair competition let me give hon. Members opposite a reminder on that subject. Unfortunately, the coal mining industry has not the money, without borrowing, to bore for oil and gas in the North Sea. It has chemical plants attached to the pits. Every steel plant that was erected also had a chemical plant put up beside it. and so had Colvilles with £500 million that the nation lent at very reasonable interest rates. I am not sure what they were, but they were so low that it was very difficult to get information about them. Those chemical plants used the coke that was produced to supply its steel industry.

Mr. J. H. Osborn: Would the hon. Gentleman agree that the whole concept of an integrated steel plant is to use the by-products and to use the various gases from the coking plant for its own requirements—furnace requirements or otherwise? A steel plant is an integrated unit.

Mr. Wainwright: Hon. Gentlemen opposite always seem to jump in too soon. When steel was in total demand the steel plants took the coke from their own plants and also from the Coal Board plants. When steel was in less demand they said that they did not want the Coal Board's coke. It was used as a buffer.


The hon. Member for Worcestershire, South (Sir G. Nabarro) spoke of about 20 per cent. of road haulage being kept under nationalisation. That was an attempt to have it as a buffer to bolster up private enterprise and use it only when it was necessary. [AN HON. MEMBER: "That is public competition."] That is not public competition. It was not arranged for that, but, thank goodness, it was allowed and it did compete with private industry and paid dividends to the State.
I hope that there will be success for the Coal Board in the North Sea and that it will be allowed to bore on land and will be successful. The Government should have started this project two years ago. I know that the apology will be that we have done as much as we could in two years. There should have been a consortium of the nationalised industries and we should have had a fuel policy. We should now have been in a far better position to supply the cheap fuel that is so necessary to make us viable and more competitive with our overseas competitors if we had had a fuel policy enveloping the fuels that are required in industry from the various sources.
I was rather shocked that the Opposition dared to oppose the Bill. That shows they are opposed to anything that can be utilised on behalf of the nation and that they think more about the private individual than the country as a whole. The Bill should have had their blessing and not their opposition.

8.19 p.m.

Mr. John H. Osborn: I preface my observations on the Bill with two items. First, the welcome news that the Minister of Power expects a daily output of 1,000 million cubic feet of gas and hopes that we shall have 13 million tons a year of coal equivalent by 1970. But I support the view of the hon. Member for Orpington (Mr. Lubbock), who suggested that it might go further than that.
The other item of news I mention concerns Bevercotes. Remembering the arguments that we have already had, I ask myself whether the National Coal Board is like a prehistoric dinosaur, be-

coming so inflexible and so large that it may find it difficult to survive. Could it be that, because of its size, the Coal Board has been unable to handle a very delicate situation which, if successfully handled, could ensure great benefit in the future from automated pits? There has been a good deal of comment in the Press. I mention only what the Daily Telegraph has to say today:
Having failed to convince the miners, it has little to gain by surrendering to them.
My hon. Friend the Member for Yeovil (Mr. Peyton) was much more emphatic.
These two items concentrate our minds on the two questions we must consider, one, the availability of natural gas, the other, what the National Coal Board is in business to do. At first sight, the Bill appears fairly harmless. The basic provision is in Clause 1 (1,a)—
to search and bore for and get petroleum within the meaning of the said Act of 1934 in the sea bed and subsoil of the territorial waters of the United Kingdom adjacent to Great Britain.
This by itself seems harmless enough, but, obviously, there are two issues here. First, to what extent should the National Coal Board or, for that matter, any other industry diversify and to what extent should it concentrate and streamline its activities? The trend is for private industry now not so much towards devoting its attention to diversification as to concentrating its energies on a smaller front in order to be more efficient and competitive. The second question is to what extent this critical decision is based on Socialist political dogma and to what extent it is based on sound reasoning. The nation wants an answer to both these questions.
Over the centuries, the complaint has been that we have had one law for the rich and one for the poor. Today, we politicians ought to ask whether we now have one set of laws and conditions for the private sector and another for the public sector. Legislation over the past two years is making it more and more difficult for the private sector to operate, while, on the other hand, conditions are becoming more and more liberal for the public sector. Unless the public sector is subjected to the financial disciplines we want to see, it will be the taxpayer who pays in the end.
I shall now make three quotations from a recent debate. The first is:
None the less, when all that argument has gone through, this remains. There are, first, some traditional arguments for the larger concerns which are still valid. For example, the industry which is so reorganised has to remove unnecessary variety in the range of products.
I emphasise those latter words. The second is:
There is, further, the wide range of general arguments showing the risks of allowing an industry to continue unrationalised and stressing the importance of securing an industry's optimum structure."—[OFFICIAL REPORT, 19th October, 1966; Vol. 734, c. 218–9.]
Here is the third statement:
Nobody could deny that British industry … could not really survive, even in a modified form, in a world where our competitors built up a different type of organisation based upon concentration, specialisation of the economy and long runs."—[OFFICIAL REPORT. 19th October, 1966; Vol. 734, c. 347]
The first two quotations come from the speech of the First Secretary of State in moving the Second Reading of the Industrial Reorganisation Corporation Bill, and the third came from the Minister of Technology in winding up. Thus, less than two weeks ago, we had a debate in the House in which arguments were put to justify the rationalisation of industry.
In that debate, I went into considerable detail on the subject of the private sector, saying that the Socialist Party, its leaders as well as its back benchers, had
turned completely head over heals
in the last four years.
It is now saying that rationalisation and mergers are good."—[OFFICIAL REPORT, 19th October, 1966; Vol. 734, c. 271.]
I went on to point out that the Conservative Party had always acknowledged that mergers were desirable and that modern British professional management in particular had been aware of the advantages of rationalisation and concentration. Two weeks ago, therefore, in the context of that Bill and with the private sector in mind, I agreed with the Government to a certain extent, accepting that there was need for greater concentration so that management would concentrate its energies rather than diversify them.
What do we have before us now?—a Bill proposing that the National Coal Board should do exactly the opposite.

In the debate two weeks ago, management criteria were brought into the discussion. Why is it that the same management criteria, which are brought forth with such knowledge by hon. Members opposite who know so much about the private sector, do not apply to the public sector as well? We opposed the Industrial Reorganisation Corporation Bill because we regarded it as wrong and the wrong means to achieve rationalisation. Now we have a new Bill before us which, though I do not stretch the analogy too far, it is proposed to make into another law not for the rich, as I said, but for the nationalised industries.
The Coal Board is to be given power to diversify. Is it wise on economic grounds for an industry to diversify into an activity in which it has no practical experience, and in which, as my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) pointed out, it is going into the field against others whose competence is of international repute? In private industry, one does not embark on a venture in a field which has already been covered by people who have expertise and know-how unless one is certain that one's new expertise and "know-how" is better than the expertise already at work.
Is it the suggestion that, with public funds behind it, a nationalised industry need not think of this? Is a management which has been trained in the art of gaining coal from the soil, in the techniques of mining coal, bringing it to the surface, preparing it and transporting it, likely to compete efficiently with those already expert in drilling and exploration? Will not this be yet another example of a public sink down which the taxpayer's money will be poured?

Mr. Ogden: Did not the hon. Gentleman hear what the hon. Member for Orpington (Mr. Lubbock) had to say with reference to the Rio Tinto Mining Company? If it is right for Rio Tinto to go in, why should not the National Coal Board do so? Are not the special facilities which are on hire to the highest bidder, the drill operators and the rig operators, open for sub-contract to the National Coal Board in the same way as to the other 23 concerns in the North Sea?

Mr. Osborn: The hon. Gentleman has jumped in too soon. The criterion there is that the shareholders of Rio Tinto or any other such organisation have confidence in their board to take the right decisions. Is the National Coal Board management likely to give an adequate return on capital employed? We have had the example of the "Bronowski bullet". It is eventual return on capital employed which matters. If we are to have these lectures from hon. Members opposite in debate after debate, with all the talk about the need for the private sector to meet its targets, the same criteria ought to be applied to the public sector.
To what extent is it reasonable to suppose that the Bill is the result of political as against economic motives? We oppose the Industrial Reorganisation Corporation Bill because we suspected that there are political motives as well as sound economic arguments for rationalisation. Hon. Members opposite have spoken about the advisability of taking into public ownership all operations pertaining to natural gas and oil. Admittedly, the Gas Council is already involved, and there are many other examples. But because time is short and other hon. Members wish to speak I shall not reiterate all the different statements in Labour Party documents of the last five years indicating the general intention to take various activities into public ownership or to nationalise them.
In large organisations in the private and public sectors, there is empire building. There is naturally a degree of protectionism. It is human nature. Hon. Members opposite have criticised the private sector for this. Modern managements condemn it as well. But it is also characteristic of nationalised and publicly owned industries. However, there is competition in the private sector, and if that organisation becomes top-heavy it faces bankruptcy unless it streamlines itself. Are we satisfied that, in the public sector, we achieve the same objective through the Select Committee on Nationalised Industries? It is this kind of issue on which we should satisfy ourselves when money is to be put into a project, because we want a satisfactory return for it.
What is the National Coal Board in business for? Is it to supply energy? If it is, why does it not supply electricity

or go into nuclear power production? Is it there to mine and distribute coal? Is it to enter the petrol chemical business? [An HON. MEMBER: "It is already there."] Yes—and managements of large concerns diversified in many activities are asking what is the main purpose of their business and concentrating their energies on that main purpose.
Is the Board asking the same questions? Is the Minister? I hope that the Parliamentary Secretary will provide an answer to the questions. We have had references to the Staveley-Stewart and Lloyds venture in which cyclohexane and benzine for P.V.C. and nylon are contemplated. Is the N.C.B. the best type of organisation to venture into vertical integration of this type? Many arguments have been put forward—including those by Lord Robens—that the Board must have the same opportunity to diversify as the private sector. But, as my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) said, the Board is not subject to the same financial yardsticks as the private sector.
When it puts out a proposal, the private sector must make certain that there is adequate return on capital or otherwise it will not obtain the capital. If the N.C.B. were to go to the market solely on this venture, who would back it? Because it does not go to the market, we do not have that criterion by which to judge its decisions.
Under what conditions would I as a Conservative back bencher justify diversification? It is a large subject in itself. Many people working for the National Coal Board, from Lord Robens downwards, have asked me "Under what conditions can we diversify?" My immediate answer is when there is sufficient private capital to make an organisation such as the N.C.B. responsible to yardsticks to which it is not applicable now. There are vast losses to consider at the present time. Thus, on political grounds, because of dogmatic statements by the Socialist Party, I am suspicious. I am also suspicious on economic grounds not least because of the Explanatory Memorandum:
No estimate, however, can be made at the present time as to the effect of the Bill on progress towards that borrowing limit.
I am suspicious because I do not believe that public participation without


economic yardsticks leads to fair competition. I am not certain that we know what the N.C.B. will do with the natural gas and oil when they are discovered, if in fact they are found. I am not certain that the cost of extraction and exploration and drilling will justify the expenditure of public money.
Unless the Parliamentary Secretary can give a much better explanation than we have yet had, I shall urge my hon. Friends to oppose the Bill, not on political grounds, although there are political grounds for opposing it, but on economic grounds, because we do not have a guarantee that economic yardsticks will be applied.

8.35 p.m.

Mr. Cyril Bence: I was rather surprised by the remark of the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) that there seemed to be one law for State enterprise and one for private. It was during the last 15 years under Conservative Administrations that we had Amendments to Acts relating to the electricity industry and the transport industry and others by which powers were removed from them, but not from private enterprise. The powers to manufacture were taken from the electricity industry, although they were powers possessed by the old public utilities in the days of private enterprise.
When the grid system was set up long before the war and after the war when electricity boards were created, the power to manufacture was possessed, and it was during Conservative Administrations that it was decided that electricity boards should not have the breadth of commercial operation which private limited liability companies had. It was, therefore, the hon. Gentleman's Government which decided to have one law for private enterprise and one for State enterprise.
This is a Bill to give to the Coal Board the sort of wide powers for the general extraction of fuel which would be given to a limited liability company, such as Rio Tinto or Shell or B.P., by its articles of association.

Mr. J. H. Osborn: I forgot whether the hon. Gentleman was present when my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) was explaining the extent to which in the early

days the industry carried on its own maintenance and manufacture of equipment. My hon. and gallant Friend said that before the industry was nationalised the coal owners learned that it was much better to have equipment provided by experts. The hon. Gentleman has taken my argument out of context. Quite apart from the political scene, industry nowadays has found that it is better not to make specialised equipment but to have it made by experts.

Mr. Bence: I do not quarrel with that proposition, but this is a Bill to give certain powers to a great extractive industry. We are not asking it to manufacture something, haulage machinery or drilling machinery. It is probably true that the National Coal Board could buy equipment of that kind more efficiently from producers who specialise. We are saying that an extractive industry such as is run by the National Coal Board, which is almost wholly concerned with the extraction of fuel, mostly in the form of coal, although it is engaged in some light carbonisation of coal, producing petroleum spirit and coke and various fertilisers, and the manufacture of bricks, should have powers of the sort provided by the Bill.
Coal is getting scarce. One cannot keep extracting coal from the earth; there is a point when it becomes uneconomic to do so. This is the one job that the Board has to do. The hon. Gentleman opened his remarks by asking, had we created a dinosaur in the Coal Board? He said that it was inflexible, and if one thinks in terms of an extraction industry, limited to the extraction of coal, then the Board will become a dinosaur because supplies of coal will diminish and will become economic to mine in terms of natural gas and petroleum spirit. What the hon. Gentleman wants to do is to preserve the Board as a dinosaur, because he wishes it to die.
This Bill seems to enable the Coal Board to move out of the age of the dinosaur and become a more lively creature, able to extract fuel other than coal for the country's use. It can extract natural gas and oil. The hon. Gentleman talked about Rio Tinto and the Coal Board not having the expertise. I am surprised at him using that sort of language. One of his hon. Friends said


in a Committee of this House, dealing with another piece of legislation, that there were some directors who knew where their industrial plants were.
The truth is that the duty of a board is not to have expert knowledge in any particular technique in which the company is engaged. Its duty is to use its natural intelligence and experience to search out and employ the experts to organise its activities. Limited as my experience is, most of the directors whom I have met as an engineer have either been chartered accountants, representatives of insurance companies or banks.
In the old days, there were very few technical directors on many of the boards of our large industries. They simply sent for their technicians, questioned and examined them. I have told stories in this House, ten or fifteen years ago, about directors posing some very funny questions to technicians. I will not repeat them because they are in HANSARD, if one looks up the copies for 1950, 1951, 1952 and 1953. There were stories about directors who were clever accountants and excellent financiers but knew nothing about engineering techniques or metallurgy and chemical engineering.
I am certain that many of the directors of our large companies are not experts in the particular field of operations in which their company is engaged. I am not condemning them for this. The argument of the hon. Gentleman that the Coal Board should not indulge in this because members of the Board are not experts in drilling is wrong. I do not suppose that the directors of Shell-Mex and B.P. Ltd. are experts in off-shore drilling, but there are plenty of experts to be employed.
I do not see why the Coal Board should not be given power to employ drillers to search for oil and natural gas. I would go some way with the hon. Gentleman if the Board were to have a monopoly of this power. It is always worth a long discussion to decide whether we should give absolute monopoly powers to anyone over all the ranges of fuel that the country needs. But we are not asking for that. We are bringing the Coal Board into this field of fuel extraction, and I think that is the right thing to do.
I have heard it said many times by Conservative Ministers of Fuel and by back bench Members of my party that

one of the most desirable aims of any Government should be to try to get a cohesive national fuel policy. We have this great industry concerned with the extraction of coal. We have to use coal as a source of power. We have to generate electricity by the use of coal. We have oil, and now we shall have natural gas. We have the conversion of coal into coal gas. The House is amply justified in giving the Coal Board the right to enter into all the fields of fuel extraction.
I have not heard anyone today complain that the Coal Board gives licences to private individuals to mine coal. It is not only the Coal Board which extracts coal in this country. There are also private mining companies which received licences from the Coal Board. The Coal Board has been given power by Parliament to grant licences to private individuals to mine coal. There are three private mines in my constituency licensed by the Coal Board. I see no reason why the Coal Board should not be given the right to go in for other fuel extraction such as oil and natural gas.
I commend my right hon. Friend in introducing this Measure and giving the Coal Board, not different rights from anybody else, but the same rights and opportunities to extract fuel as we give to many other individuals and which is given by the Coal Board itself and by the State to the Standard Oil Co. of America, Shell-B.P., and other organisations concerned with the extraction of fuel. The more forces we bring to bear in exploring the natural resources of our country and the shelf round our country, the better for the country. I commend the Bill to the House.

8.47 p.m.

Mr. Nicholas Ridley: The hon. Member for Dunbartonshire, East (Mr. Bence) is adept at discussing a Bill which he has not had a great deal of time to study and in adding greatly to a debate the whole of which, perhaps, he has not been able to hear. I congratulate him on his performance tonight. It was ingenious, unobtrusive and unobjectionable. I shall refer later to some of the points which he made.
The Minister did not come clean during his speech. My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) asked him specifically


whether he would write into the Bill an undertaking that the Bill was not to allow the Coal Board to go into the chemical industry and the oil industry through setting up refineries. But the Minister dodged the question. The only assumption which one can make from that interchange is that it is the Government's overt intention to allow the Coal Board to wander into any aspect of the chemical industry or oil industry that it wishes through the door of this Bill. I shall therefore address my remarks to the un-desirability of this loose attitude to what are and what are not the functions of a nationalised industry.
The least futile of our nationalised industries are those which provide physical services such as roads, telephones, railways and pipelines where obviously it is very expensive and not sensible to duplicate networks by having competitive networks as one would have in a private enterprise system. The Americans have great difficulty in this because they find that they have to apportion areas to each company. By far the best defence of nationalisation can come in industries such as that.
When one goes to the productive industries which do not have networks or services such as the coal industry, the case becomes immensely weaker. I will not deploy the case against nationalisation at the moment, but I believe that the most stupid thing that we can do is to have industries in which certain elements and parts are privately owned, with others publicly owned. I have a deep rooted objection to the practice on economic as well as political grounds which I should like to elaborate for a few minutes.
Nationalised monopolies may be efficient or inefficient, but their effect on the economy as a whole is limited. What the Bill seems to do is to give the Coal Board power to enter fields of activity that it is not already engaged in and extend its empire into several different industries where it will be able to set up subsidiaries to operate in competition with individual firms.

Mr. Bence: I wonder if the hon. Gentleman would support the run-down and disposal of Admiralty shipyards.

Mr. Ridley: Where military matters are concerned, the considerations are quite

different. However, I would support the run-down of the National Coal Board's brickworks, for the reasons which I am about to give.
A nationalised industry has an unlimited supply of cheap capital in comparison with firms with which it is competing. It can make up losses which it accrues because, in the end, the taxpayer has to keep it afloat. We cannot say, "Very well. The Coal Board is bankrupt. We will wind it up and liquidate it because it cannot pay its debts." In that way, a nationalised concern can drag down the market price in an industry and cause serious economic distress to its competitors, at the same time making up any loss from the taxpayer. It is the ability to do that which makes it a fundamentally wrong economic concept to have nationalised industries competing with private ones.
An organisation as big as the Coal Board has many divisions, with a turnover running into hundreds or thousands of millions of £s. It can easily hide any losses that it may make in the North Sea in some other part of its finances. My hon. Friends have mentioned that point from many different aspects.
It will operate from a protected monopoly position to enter the exploration world, the coal derivatives world, the oil world or the chemical world through the various subsidiaries which my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) mentioned so carefully and ably this afternoon, and can do great damage to competition.
True competition is a very delicate plant. If we failed in the Tory Party in some measure in those 13 years, I believe that it was because we did not pay enough attention to competition, because we did not make it bite, because it was not entirely fair, and because we did not remove the impediments to competition to the degree that we should have done. It cannot be made to work if rings and rackets flourish. It cannot be made to work if there are some rules for some competitors and other rules for other competitors.
What is more, it must be enforceable. If there are to be failures due to people going out of business through the working of the competitive system, they have


to go out of business and not be subsidised by the taxpayer bringing them back to a level where they can start again, and go back into the market. It is the failure to apply those principles rigidly and strictly which in part is perhaps responsible for the difficulties of the last 13 years and in great measure will be responsible for our further economic decline under right hon. and hon. Gentlemen opposite.
I believe that we may sometimes need competition on a worldwide scale. It seems to me that it would be reasonable to reduce national protective tariffs and barriers to make competition worldwide, and this might well be what the Coal Board would like to see done. It is my experience that wherever one goes in the world, and whenever kind friends say what is wrong with the British economy, they say that we are not competing, neither in the public sector, nor in the private sector, properly, fairly, or honestly, and any Bill, however small and futile, as this one is, which detracts from the true, fair, ability to compete is a bad Bill, and is not worth the time which the House spends considering it.
If the Coal Board wishes to compete, if it wishes to enter into competition with private enterprise in all these different fields, let it compete properly. Remove the ban on the import of foreign coal. Why should the Board sit in a protective little market here all on its own? Remove the protective tax on fuel oil, and let the Board compete with fuel oil. This is what competition is about.
If this industry wants to compete, I am telling it what it has to do to start to compete in its own field. Let it allow private enterprise to dig coal. It is no good the hon. Member for Dunbartonshire, East saying that there are three private mines in his constituency on licence from the Coal Board. Who ever heard of a company licensing its competitors? The moment a competitor becomes tiresome, its licence is rescinded, and the hon. Gentleman knows that. It was a spurious and bogus point, although I congratulate the hon. Gentleman on having thought of any point at all.
Let us allow some big civil engineering contractors to go into the Coal Board's area and start opencast mining a couple of million tons at a time and do the job properly. We will then see whether the

industry wants to stand up to competition on its own. This is the logical conclusion of the Bill. If the Government want the Coal Board to go chasing after oil and gas in the North Sea, let us allow oil companies and contractors to go into the coal fields and show the Coal Board how to do its job. These people would be happy to do it.

Mr. Bence: Nobody applies.—[Interruption.]

Mr. Ridley: Mr. Deputy Speaker, I should be grateful for your protection. I can hardly hear myself speak because of the speeches being made by hon. Gentlemen opposite from seated positions.
Lastly—and this is a very important point—if the Coal Board is going to diversify, let it keep separate accounts, and let it allocate to each of its activities what it has spent on management, on training, on all sorts of extraneous expenditure, on interest on capital, and let it show its profits on each activity.
The Board's accounts are a disgrace, because they do not tell us what we want to know. The Board fudges together all its diversified activities without any key as to which is profitable and which is not, and at the end of the accounts it says, "By the way, we have also spent £93 million on common services such as management, training, administration, and so on." This is not good enough. The Board may give a detailed account later on, but it does not do it in the main part of its Report. We must have a clear division between each branch of the Coal Board to show which part of it is dealing with which diversified activity.
If the Board is to go in with the chemical industry, or with the oil industry, it is fair to ask it to raise the capital to do this on the same terms as private enterprise raises its capital. Let the Board go into the market and pay the market rate for its capital. Why should I subsidise the Board out of the tax which I pay on my income to enable it to do this job in the North Sea? Hon. Gentlemen opposite want the Board to do this. They have all spoken in favour of the Bill, but they have not said why I should subsidise the Board. I shall have to do this through the interest rate because the Government will lend the Board cheap capital. If we are to have competition, I am against it. I do not think that it is


fair competition between private and public enterprise, because I believe that the ultimate sanction is not there. But if we are to have this competition at least let the Government insist upon the various parts of the Coal Board declaring proper accounts, working by the same parameters as do their private competitors.
Listening to some of the speeches made by hon. Members opposite—especially that of the hon. Member for Dearne Valley (Mr. Edwin Wainwright)—one could quite easily form the conclusion that the party opposite is against private enterprise in a rather round and offensive way. On many occasions hon. Members opposite have said that my hon. Friends and I are against nationalised industries. I wish that once and for all it could be cleared up that we are not against the nationalised industries as they stand; nor are hon. Members opposite against private enterprise as it exists. We may have our battles as long as we like about the desirability or otherwise of nationalising or denationalising, but this must not be regarded, as the hon. Member for Midlothian (Mr. Eadie) tried to suggest, as meaning that we in some way resent, denigrate or attack the people who are employed in the nationalised industries and the magnificent work that they do. One can be anti-nationalisation and still try to make it work, and one can be anti-private enterprise and still hope that it will succeed where it exists. This element in our debate has not been very helpful.
Hon. Members opposite have been very much on the defensive about nationalisation. They have to support it, and they have to march uncritically through the Lobbies in its support without having had the chance to look at the structures and organisations logically and to consider the matters that we have been discussing. We must find rules which, more than hitherto, introduce into the nationalised industries a proper financial discipline, and cause them to compete fairly and to raise their capital and present their accounts on similar terms as those which exist in respect of other industries.
It would have been much more constructive if some hon. Members opposite had turned their attention to the way in which nationalised industries could be caused to compete fairly with private

industry. When my Government were in power they did a great deal, with the financial target, the definition of commercial interests and many other worthwhile reforms, to lead nationalised industry in the right direction. Suddenly this has all seemed to go. The Coal Board is going into the supply of building materials, oil, gas from the North Sea, and all the rest of it. It is wrong to have such a sloppy discipline.
The morale of those who work in nationalised industries is very important. For all my strong criticism of nationalised industries I should be the last to say that the people in those industries are in any way inferior to the people working in any other industrial set-up, private or public. But the way to ruin the morale of the people working in the nationalised industries is to place them in a position in which they do not compete fairly. It is stupid to say to the Coal Board, "You can have all this advantage, and if you fail you will not go bankrupt." The effect that that has on the morale of the staff—the managers and the men, right down through the organisation—is to make them feel that in some way they are different from the people who work in competitive private industry. The worst contribution that we can make in this respect is to allow the Coal Board or any other nationalised industry to compete on unfair terms with private industry.
There would have been many better ways for the Government to use this day. We have all had our holiday chopped by three weeks, and I am distressed and depressed to come back from the Recess to find that what I am being asked to do is spend three or four days, with the Committee stage, Report stage, Second and Third Readings, on passing this little bit of drivel. It is doctrinaire, political nonsense. No thought has been put into it and no arguments advanced for it. It is to me as irrelevant and irresponsible and unnecessary a Measure as the Government could have brought forward at this time. I hope very much that it is defeated.

9.5 p.m.

Sir John Eden: Echoing the closing sentiments of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), I should like to begin my speech by saying that,


when the Government come to the House to ask it to agree to an extension of the powers of a nationalised industry and in that way to vote it more money, we should get far more justification than we were given by the Minister of Power when he moved the Second Reading.
His speech was extremely thin. He gave no indication of the future planning by the National Coal Board. He did his best to sketch over what are clearly the controversial aspects of the Bill, so apparently, as to try to avoid any sort of scrutiny or discussion. Those of us who are members of the Committee discussing the Iron and Steel Bill know that this is not the first time that the Minister has treated proceedings of the House to that sort of scarce and scanty attention.
My hon. Friends have made it abundantly clear that we object to this proposal on commercial and economic grounds and that we are highly suspicious of it on political grounds. It is right that many of my hon. Friends should have started by having a somewhat critical look, inevitably, at the Coal Board's existing operations. If we are to be asked to approve an extension of what a nationalised body is already doing, we are justified in having—I believe that we are required to have—a careful look at the manner in which its present obligations are being discharged.
The National Coal Board is confronted with a number of very substantial problems at the moment, and none of us has attempted to minimise the size of the tasks with which it is faced. None of us on this side—I say this quite clearly, lest at any later stage in my speech my remarks become misconstrued—in any way detracts from the very deep, human considerations involved in what the Coal Board is currently trying to do in progressively closing down the uneconomic pits. It has a tremendous job here in the redeployment and, in many cases, retraining of the men it employs.
It has also a tremendous task in trying to ensure the proper employment of the capital investment. Some of my hon. Friends were taken to task for their reference to Bevercotes. My hon. Friend the Member for Yeovil (Mr. Peyton), in his usual colourful and effective language, described our sentiments on this point. I would just add to what has already been said on this subject by in

viting the Board, and Lord Robens in particular, to recognise that the best way of protecting the investment at the coal face is to make sure that the investment it already has there earns money and is fully employed. My hon. Friend the Member for Barkston Ash (Mr. Alison) developed another aspect touched on by others of my hon. Friends—the Board's attempts to develop supplies of smokeless fuel. Reference has already been made to the enormous capital expenditure involved in the Immingham port development scheme.
The point of drawing attention to this aspect of the Board's existing operations and obligations is not to denigrate the Board, not to pinpoint, highlight and accentuate or in any way exaggerate any failings or weaknesses, but simply to underline the fact that it already has more than enough to cope with and that it is unnecessary for it now to turn to wholly new fields for investment and exploration. Further, we are considering the request of an industry to extend its operations into a highly speculative enterprise when the industry in its own sphere has already over many years of trading incurred a very substantial deficit. The House was recently asked to approve the writing-off of £415 million because the industry is still uneconomic.
I do not think that this is the time for the Board to embark on new ventures, and particularly a venture of such a highly speculative nature as this, for which it was never designed, and for which it is wholly unsuited. The Board exists to get and distribute coal in the most efficient manner possible and it has a long way to go before it achieves even the standard of efficiency in this respect mentioned by some hon. Members opposite.
A great deal of comment has been made on the extent to which the Board is diversified. In considering this aspect I read, as no doubt other hon. Members did, an article by Richard Bailey in the August issue of the Westminster Bank Review I have the highest regard for Richard Bailey though I did not agree with much of his article. He said that in any discussion of the future of a particular nationalised industry
… it is difficult to separate the economic grain from the political chaff.
I do not think that political chaff is the right description for some of the political


objections I have to the bringing forward of this Bill, but I hope, first of all, to look at such elements of economic grain as can be found.
The first lies in the argument that, as the Board has already diversified extensively and substantially, there is no real fundamental reason why it should not go further, as is asked for in this Bill. In parenthesis, I briefly declare an interest which is already known to some hon. Members. I am engaged with a company whose concern is to assist in the diversification and merging of industrial companies.
As is well known to hon. Members, the Board is already substantially involved in brickmaking, concrete, flooring, damp courses, in the making of heaters, in tar products, in pitch polymers and other aspects of the chemical industry. It is a substantial and wide-ranging list of activities, but far and away the major part of what is already being done is the logical extension of its primary function of the mining, processing and marketing of coal. This was clearly anticipated in the terms of the original nationalisation Act. I thought my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) argued on this aspect very thoroughly. We have to make up our minds, and hon. Members opposite have to answer for themselves the question, are we now contemplating the creation of a new giant industrial holding company the interests of which will go far outside the primary purposes for which the coal industry was originally nationalised?
There are advantages in industrial holding companies, but these advantages exist only where there is present an abundance of skilled management talent. I think it important to emphasise that point. It is no good widely diversifying operations unless we can be certain that we have the proper structure, the proper management talent, to handle the diverse interests embraced. This test of diversification must apply equally to the National Coal Board.
I carry this a stage further. It more than any other of the public industries, dependent to a substantial extent as it is upon taxpayers' money, must subject its diversification proposals to the pretty rigid test of whether any new scheme or venture assists in its primary function. If not, I

agree very much with the sentiments expressed in an article in the Economist on 22nd January this year that if this cannot be shown it is using up scarce resources of capital and manpower.
On this point I question the interventions of a number of hon. Members opposite who spoke most feelingly from their experience as members of the National Union of Mineworkers and as men who have been engaged in this great industry. I cannot see how this new departure into a totally different field from that in which it is currently engaged and for which it was primarily established will, to use Lord Robens' words, assist in the protection of the investment at the coal face. In other words, I do not see how it will help the miners themselves.
My hon. Friend the Member for Gloucestershire, South (Mr. Corfield) referred to the position of Staveley Chemicals. I think this raises wider questions than other aspects of the Board's existing diversification. Staveley Chemicals has been set up in order primarily to manufacture P.V.C., but, as my hon. Friend made clear, in the articles of association it can go into the full range of the chemical industry.
I wonder if the Parliamentary Secretary who is to reply to the debate will make clear that it will not be in order, should this Bill be passed into law, for the National Coal Board to use its supplies of natural gas—assuming it gets those supplies—for the purposes of the operations of Staveley Chemicals. I should like to have this spelled out because I think it is basic to our whole approach. Further than that, am I right in saying that, if at the outset this appears to be the case, it will not be so entitled under the terms of the Bill? In other words, if subsequently it wished to do so, it would not be a case of it merely going to the right hon. Gentleman for him to promote a further Measure before the House to give it powers to use its natural gas in that regard?

Mr. Marsh: The position is that the Coal Board would be in exactly the same position as anybody else in this field. It will be able to use the natural gas for its own purposes. If it wants to use it outside its own purposes—and "outside" would include associated companies as distinct from the Board or its immediate environs—then it will have to get the


permission of the Minister. There will be no further legislation. That is exactly the same position as everybody else is in.

Sir J. Eden: To get the permission of the Minister—and I am grateful to the right hon. Gentleman for making it clear in what he has just said—they will virtually have the right to use this natural gas for the purpose of the Staveley Chemicals operation. My hon. Friends and I have been fully justified in having the degree of suspicion which we had when this Measure was first brought before the House.
There is the further point on this aspect of diversification, which was touched on by my hon. Friend the Member for Gloucestershire, South. When the subsidiary companies of the diversified companies in which the National Coal Board has an interest start trading in a number of other fields, the line of control becomes fogged and fudged indeed. This House must be aware of what, in fact, it is doing. It has always sought to have some measure of control over the operations of nationalised industries, and quite properly, because a very substantial degree of public money is involved; and if we are not the guardians of the public purse in this House, then we are nothing at all.
Yet here we are apparently being invited to give an open cheque for the operations of a number of companies, albeit one square removed but none the less directly associated with the nationalised industries, in this instance with the National Coal Board, which we would find difficult indeed to cross-examine or to comment upon in this House. This applies not only to Staveley Chemicals but also to the operations of the British Anthracite Company and its subsidiaries. The point of financial control is very important indeed, and unless we watch it it will become virtually impossible to hon. Members in this House.
If it is argued, as has been suggested, that association with private enterprise, in the manner in which the National Coal Board is to join forces with the two American companies, will ensure that checks against ill-considered investment will be established, then this is no argument at all in defence of the proposition.

It is, in fact, an argument against the further extension of public ownership.
If the National Coal Board is to diversify in this way, then to what tests are these purchases to be subjected? Other companies now currently engaged in this work are Rio Tinto and I.C.I. and within the operations of those companies there are frequent opportunities for checking the commercial viability of the operations on which they are engaged or on which they contemplate embarking. There are in the Bill no new provisions for financial control. In what way, for example, will the element of cross-subsidisation be identified? If the Board finds itself engaged in a highly profitable venture in one sphere, is it not right that we should know to what extent it is using these proceeds to subsidise the unprofitable elements in other spheres, the sum total of which may result in its calling again upon the public purse for further support?
Apparently the basic mood in the Government's mind and in that of the Board is to protect the investment at the coalface. The Minister has said that the extent to which this will take place will involve the expenditure of a £6 million stake over a matter of years in the preliminary search which will be done primarily by the two experienced American companies.
My hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) brought out a point which requires very careful answer by the Parliamentary Secretary. Here the Board is contemplating going into a highly speculative field as a sleeping partner. We are being invited to endorse in the House a form of diversification which will not give the principal party with which we are concerned any control whatsoever over the investment that takes place as a result of it.
This is a most improper use of public funds. It is certainly the most improper way of diversifying the activities of the Board. If the Board is so keen to enter a speculative adventure of this nature, at the very least it should be made to go to the market to obtain risk capital at the real market cost. Other companies engaged in this operation have to do that.
We have had a lot of new loose talk from right hon. and hon. Members opposite about the public interest. I do not think that any of them have ever properly defined what they mean by the public interest or the national interest. If they mean the interest of the Board, let them say so and let them recognise, as we do, that we are being invited to assist the Board in competing on special terms, on terms substantially to its advantage against others who have to turn to the market at much higher rates for their capital requirements.
If the nationalised industries are to compete with private enterprise in this way, they must both share in the same disciplines of the capital market. I understand that before long we are to have a Companies Bill. I hope that that Bill will encourage fuller disclosure by companies of all kinds. I suspect that it will. I know that that will be welcomed.
I also hope that the Government will demand fuller disclosure from the nationalised industries. We want to know much more of the plans of the Board. We want to know in respect of the Bill much more about the estimates upon which this investment is being made. We want to know much more about what information and assumptions the Board has got and has adopted to justify a further departure into a new field of this kind.
I must admit that I am always highly suspicious when right hon. and hon. Members opposite suddently start proclaiming the virtues of competition. As my hon. Friend the Member for Cirencester and Tewkesbury properly made clear, this is not competition. Competition, to be justified as such, has to be manifestly fair and has to be contested on equal terms. There is no element of fairness in the competition now being proposed by the Board.
I argue on economic and on commercial grounds that no case whatsoever has been made out for the proposition that the future of the coal industry is dependent upon its having a stake in the natural gas operations. The natural gas developments are vastly exciting. They are bringing new resources of fuel to this country which must have a tremendously important impact upon the whole of our economy——

Mr. Russell Kerr: And profits.

Sir J. Eden: And potentially profitable, and I hope that the hon. Gentleman views the profit with a great deal of favour, because the one thing we want to avoid——

Mr. Kerr: Is all the profit going to private pockets and not the people?

Sir J. Eden: —is the sort of running losses that have been incurred by the National Coal Board, of which the cumulative amount since 1946 is over £115 million. As a taxpayer—and I suspect that this even goes for the hon. Gentleman—I would much rather see substantial profits being earned than losses of that order. That is one other reason why I am somewhat dubious about the wisdom of inviting the National Coal Board to join in this great and exiting new adventure.
The one thing that must be clear is that with this new discovery of natural gas the Government should be going out of their way to ensure that this country benefits as quickly as possible by the dispersal of fuel at the cheapest possible price. This is where I would think the national interests come in. It will not help the national interest in terms of speeding up the development of this new discovery to have the National Coal Board in. Or is the Minister saying that Gulf Oil and Allied Chemicals would not have been allowed to get a licence had they not agreed to participation by the National Coal Board?
The presence of the National Coal Board cannot help in speeding up the process. It certainly will not necessarily secure that we get the fuel at the cheapest prices, for I do not believe that with this enterprise at its present stage of development it is right that we should encourage the incursion into this adventure of an industry whose primary purpose must be to protect its investment in a competing product. The Coal Board has a great deal to do in its own sphere. It is in that sphere that the promise for its future must lie and it should concentrate on that.
I promised that before sitting down I would touch on what Richard Bailey called the political chaff, and it is important that we should have this in mind


when considering this proposal. It should not be allowed to stand on its own. This is not an isolated proposition for the extension of public ownership brought forward by the Government, which has clearly marked out the direction in which it is moving. The very wide powers sought in the Iron and Steel Bill, the proposal to extend in research into new science-based industries, the threat they have already made about the aircraft industry, and the iniquitous proposals debated earlier in the week for the Land Commission, all clearly show that the Government have scant regard for the rights of ownership. This further extension of public ownership, however thinly veiled, would have no support from this side of the House, still less when, as now, the Government cannot even justify it on economic or commercial grounds. For those reasons we shall vote against the Second Reading of the Bill.

9.30 a.m.

The Parliamentary Secretary to the Ministry of Power (Dr. Jeremy Bray): This very modest Bill has given rise to an interesting debate because it is the first full day's debate we have had since the North Sea gas discoveries were made earlier in the year. It is therefore natural that the debate should have ranged widely and I shall do my best to reply to the many questions raised from both sides of the House. Before I reply to particular points we should remind ourselves again, as my right hon. Friend reminded us at the beginning of the debate, of the very limited purposes of the Bill in simply enabling the National Coal Board to participate in the North Sea venture.
The Bill arose in the first place out of a wish to increase the British interest in North Sea exploration. The importance of the British interest was admitted by the hon. Member for Gloucestershire, South (Mr. Corfield) when he opened for the Opposition. But the first round of licences issued by right hon. Members opposite gave only 30 per cent. of the area to British operators. In the German part of the North Sea, by comparison, 42 per cent. went to German operators.
Inheriting that position, my right hon. Friend's predecessor——

Mr. Peyton: It was made perfectly clear by the Parliamentary Secretary's right hon. and hon. Friends at one time that they were at liberty to tear up any arrangements made by the previous Administration. Why did the Minister not do so?

Dr. Bray: For the reason to which I am just coming. Inheriting the position as we did, the wish to increase the British stake was, naturally, constrained by the fact that the first round licensees had the built-in advantages of having North Sea experience and equipment on the spot. That we were able to raise the British share in the second round—37 per cent. of the options in the second round went to British licensed operators—was a very considerable achievement.
Some of my hon. Friends say that 37 per cent. is good but would not 100 per cent. be rather better? First, one has to bear in mind the experience of overseas companies in offshore exploration and development. No one who has been out to a rig or one of the barges can doubt the contribution which overseas operators are making in the North Sea. This experience is valuable and, undoubtedly, without the help of overseas operators North Sea exploration could not have proceeded at the pace it has or at the pace at which it will continue to go. Second, the inward flow of investment in the North Sea exploration is appreciable, and it is welcome particularly at this time.
But these factors are no reason for going overboard quite to the extent that hon. and right hon. Members opposite did in giving Britain a smaller share than a country like Germany, with its far more limited experience of oil operations, was prepared to claim for itself. We have to keep the British stake and the national interest constantly in mind in the North Sea venture as a whole.
The other reason—I say this quite frankly—for enabling the National Coal Board to join in North Sea exploration is to increase the participation of public enterprise. There is the obvious point that, if profits are to be made by dispensation of the State out of resources which belong to the Crown, the community as a whole should share in them. To a considerable extent, this is secured by royalties and taxation, but if we were


to increase royalties there would come a point at which private companies would find it more profitable to explore elsewhere. The more practical arrangement is to increase direct State participation.
This can be done in a number of ways, as hon. Members on both sides have pointed out. The Gas Council is a major partner in one of the groups which has already found gas under the North Sea. B.P. in which the Government is a majority shareholder is an operator in its own right. But there is a strong objective case for having the National Coal Board as a third channel for public participation.
The hon. Member for Yeovil (Mr. Peyton) asked what the National Coal Board had to contribute. It is the industrial enterprise in this country which has the greatest accumulation of geological experience of all. The hon. and gallant Member for South Fylde (Colonel Lancaster) pointed out, quite reasonably, that its experience, though in a related activity, is in an activity not directly relevant to oil and gas exploration. He spoke of the National Coal Board, therefore, as a sleeping partner. I prefer to describe it as a waking partner, which, through its familiarity with geology in general and the problems of mining, is in a better position than any other enterprise to learn the tremendous amount there is to be learned about oil and gas exploration.
Secondly, sophisticated though these techniques of exploration may be—and they become more sophisticated every year—it is still very much an art, with different schools of thought and different practices in every separate oil company. Hunch and experience play a tremendous part in the prosecution of exploration, and the Gas Council, by its participation with Amaco has access to one version of the art. The N.C.B., by joining with other partners, will have access to other versions of the art and the State, the public interest as a whole, will therefore have access to a substantially wider range of experience.
If petroleum exploration is an uncertain practice, carrying great risks, then it is also plainly in the interests of the State to put our national eggs in more than one basket. There is, of course, certainly a limit on how far risks should be spread

between the different agencies. Each must be able to sustain an adequate programme of exploration. But it can hardly be argued that spreading the risks only to the N.C.B. is to spread them too far.
Even with N.C.B. participation, however, it remains true that a very large part of the rôle of the State in North Sea exploration is to provide the framework under which operators in the North Sea can go ahead as a whole, smoothly and expeditiously. In the carrying out of the responsibility for providing this framework, the hon. Member for Yeovil, who has had experience at the Ministry, has already paid tribute to the very skilled service provided by the officials of the Department.
As the operations move into another phase of exploration and of actual exploitation, so too experience of the operators' point of view will be extremely valuable to those of us in the Government who are concerned with the framework of the operations as a whole. I have in mind not only an appreciation of the costs involved, which is important enough, but also an understanding of the many technical problems, from the need for special quality pipes to ensuring the safety and security of supplies. For example, have hon. Members considered all the implications when a substantial part of the country's total gas supply is coming through a single pipe buried in the sea bed? Experience of all these technical matters is something of which we plainly need a great deal of practical know-how.
The hon. Member for Gloucestershire, South asked whether the N.C.B. was not too big already to undertake a further operation. I wonder whether he has looked up the size of Shell and whether that size leads him to discourage Shell's explorations in the North Sea.

Mr. Corfield: What I said was that it could not be argued that the N.C.B. is too small—which is rather different.

Dr. Bray: I am grateful to the hon. Gentleman for his support in the proposition that the N.C.B. is capable of further development in view of its present scale. But there is the fact that the economies of scale need to be looked at carefully. Is the venture of one particular explorer adequate on its own? Does it have to be related to activities on a worldwide basis, and so on?
There is no point in the State incurring a double lot of overheads if it can do it with one. If there were major economies of scale it would be wildly inefficient to be operating with no less than 25 different licencees, but there is nowhere the overlapping which might have appeared. Much of the work is done by hiring contractors and their equipment. Some rigs are owned by operators while others are hired. Tugs and tenders serve all operators. There is only one pipe-laying contractor operating in the North Sea and he also operates cranes used for placing fixed drilling platforms. In exploration, gravity and seismic surveys are carried out by specialist firms and the results sold to operators, as the hon. and gallant Member for South Fylde has already pointed out.
Drilling logs are exchanged on what the operators are pleased to call a "hole-for-hole" basis and, of course, the Ministry of Power itself receives copies of those drilling logs. The rôle of the operator and of the licensee, therefore, is to back its judgment in undertaking a drilling programme and, if it is lucky in finding the capital, to exploit any discovery. Different operators will do different amounts of work themselves, but there is no diseconomy of scale in further operators entering the field. Doing so will not reduce the efficiency of existing operators and nor is there any reason to suppose that the Coal Board will be a less efficient licensee than any others who are in the field already.
Many hon. Members on both sides of the House have spoken about the main responsibility of the Coal Board and have regretted that, with its tremendous problems, which have been appreciated on both sides of the House, the Board should be entering on an altogether different field. If my right hon. Friend had had any doubts at all about the attention which the Coal Board was giving to its major problems, if he had felt in any way that the Bill would distract its attention from those problems, the Bill would not have been introduced.
As the House knows, the Coal Board is being radically re-shaped. Production is being concentrated in efficient pits and worked out and high cost pits are being closed. There are tremendous social

changes with which the Board is constantly preoccupied and this process of redeployment in which the coal industry has been long engaged, not just recently, is carried out in very close consultation with the unions at all levels, which again needs a tremendous lot of attention from management.
My hon. Friend the Member for Ash-field (Mr. Marquand) drew attention to the fact that it is the patient attention to detail, to the journeys to work and to individual prospects and the earnings of individual miners and the housing needs of families, which means so much to the individual, and all of it is being carefully attended to by Coal Board officials. It is because this process is being carried out so painstakingly and successfully that unemployment in the coalmining areas, particularly in the regions which are experiencing the fastest rates of closure, has remained less than the average of unemployment for the community as a whole. This is a remarkable tribute to the good sense and skill of unions and management in the Coal Board. We want this record to be maintained, but it does not lead us to believe that the Coal Board is incapable of undertaking further activity which is in the national interest. The Government, of course, are giving substantial support to this redeployment and will continue to do so.
It is not only the change of pits being worked which is going ahead, but there are also changes in the structure of the Coal Board itself—the reduction in the number of levels of control from five to three, with all the movements of staff and the change in areas of responsibility which that means. On top of all that, it is the firm belief of all those dealing with the Coal Board that, far from seeking an escape in the Bill, the Board is using its available experience to the best national advantage by venturing into this new activity.

Colonel Lancaster: The Parliamentary Secretary is making a most reasonable speech, but I want to ask one question. The National Coal Board has very wisely already concluded that it is not an expert in research. It does not do its own research or geological surveys and it has not done research in the North Sea. Having acknowledged that it is not an expert in this subject, why at this moment


should it go into a much more sophisticated and far more technical activity and assume that it will make a success of it?

Dr. Bray: I do not accept that the Coal Board has no experts in research. On the contrary, we have a very distinguished scientific member of the Coal Board, recently appointed, who is attending to a very interesting research programme. If the hon. Member is referring specifically to geological research——

Colonel Lancaster: I am.

Dr. Bray: —then they are too. The Coal Board has a very worthwhile programme. The Board is organised, not only in its research activities, as between engineering, mining, geology and so on, but each of its several activities is separately accountable under separate management. For example, the brickworks executive and the open-cast executive are independent organisations, entirely separate from the Divisions of the Coal Board.
This operation in the North Sea is being undertaken as another such independent operation in the interests of the nation. Hon. Members have referred to the tremendous importance, which I accept, of the confidence of the industry in its own future. This point was made by my hon. Friends the Members for Liverpool, West Derby (Mr. Ogden) and Midlothian (Mr. Eadie) and supported by the hon. Member for Yeovil. The N.U.M. is on record as saying that it has no objection to Coal Board participation in North Sea exploration, and there is also the evidence that the Coal Board is taking this on as a judgment of its own commercial interest.
In the grass roots of the industry, where the confidence issues finally operate, in the decisions of individual miners as to whether to stay in the industry, the first reaction to the North Sea discoveries was of uncertainty. Miners did not know what their future was to be. Everyone accepts that the discoveries are in the interests of the nation, and when people realise the physical limitations on the build-up of gas supplies they feel that it is a pressing problem for the coal industry, certainly to adapt to, but not one that it is incapable of adapting to in time.
My right hon. Friend has repeatedly said that for as far ahead as we can see there will be a continuing major demand for coal at an economic price. This does not exclude us from keeping a close watch on the situation, and the fuel policy review is undertaken to phase in natural gas in a way which will cause the least possible hardship in the mining industry.
A number of hon. Members have referred to the financial considerations. We feel that if it is worth while undertaking a particular project, after a full analysis of the costs and the profitability, then that project should be undertaken, and should not be limited by the general financial position of the organisation concerned. The fact that private industry does not operate on this basis is one of the causes of the difficulty which we face in prospect for the whole economy in that the reason why private firms are not planning as much investment now as they have done in the past is that they have not the cash to do so.
It is not because there is a lack of profitable projects available. In these circumstances the strongest stabilising influence in investment is, once again, the maintenance of public investments, properly undertaken, in the best interests of the nation.

Mr. Anthony Barber: I should like to put two questions to the hon. Gentleman in the light of what he has been saying. Unless it be the view of the Government that the State should diversify and enter into nationalisation projects in almost every field of activity, then the onus is on the Government to show that this is a reasonable form of activity for a nationalised industry to engage in. Will the hon. Gentleman answer these two questions—[HON. MEMBERS: "Speech."]

Mr. Speaker: Interventions must be brief at this stage.

Mr. Barber: Then I will make it one question. What complaint has the Parliamentary Secretary got about the free enterprise North Sea gas operations, and why is the Coal Board going into the business?

Dr. Bray: The right hon. Member has not been listening to the debate.
On the general question of diversification, we apply the same standards of fair


competition in this as we apply in all other activities, whether nationalised industries or Government agencies, participating in competition with private enterprise. Hon. Members have mentioned chemical manufacturers, in particular, as fearing the impact of nationalised industry diversification. I have made some inquiries. The first reaction of an eminent leader of the chemical industry was to ask, "What diversification?". My second inquiry led to a proposal for a joint public-private enterprise to scale a project for an attack on export markets. Hon. Members opposite are seeing lions under the bed when they talk about fears of diversification of the nationalised industries.
The C.B.I. has set out what it considers to be fair terms for competition from the nationalised industries. These are adhered to and observed not only in the Bill but in the present practice of the Coal Board in its other diversified activities.
On the specific question of the publicity about diversified activities, when the Coal Board undertakes the new diversified activities to which the hon. Member for Gloucestershire, South referred, all the Coal Board projects undertaken in association with private companies are announced in the Press at the time as well as being clearly included in its accounts. It is certainly the practice of this Government to expect the nationalised industries, in undertaking commercial activities in competition with private industry, to look for a comparable rate of return secured in the industry in which it is to operate.
We have had an interesting debate. Perhaps we have not had a very constructive debate. The hon. Member for Worcestershire, South Sir G. Nabarro) asks why we use public money when private money is available.

Sir G. Nabarro: Hear, hear.

Dr. Bray: Why is private money available—because it is profitable to investors. I cannot understand the attitude of hon. Members opposite. They oppose public enterprise because they say that it is unprofitable, yet do not allow it to engage in potentially profitable activity. They ban public enterprise because it has been charged with responsibility for declining industries, yet resist its application to expanding industries. So far as the processes of Government are concerned, their attitude is irrelevant. But, as a public example, their attitude to these great industries is—and I repeat it, despite what they have said—irresponsible.

Sir G. Nabarro: Drivel.

Dr. Bray: Occasionally we hear an enlightened speech from hon. Members opposite. We had two this afternoon.
The Bill will increase the resources available for North Sea exploration. It will make good use of the experience of the Coal Board without distracting from its main responsibilities in coal. It will increase the British share of North Sea exploration and the potential profits which will come to the community as a whole through public enterprise. I commend it to the House.

Mr. Patrick Jenkin: We have listened to a deplorable defence——

Mr. George Lawson (Lord Commissioner of the Treasury): Mr. George Lawson (Lord Commissioner of the Treasury) rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put: —

The House divided: Ayes 236, Noes 155.

Division No. 193.]
AYES
[9.59 p.m.


Abse, Leo
Baxter, William
Boyden, James


Albu, Austen
Beaney, Alan
Braddock, Mrs. E. M.


Allaun, Frank (Salford, E.)
Bence, Cyril
Bray, Dr. Jeremy


Alldritt, Walter
Bennett, James (G'gow, Bridgeton)
Brooks, Edwin


Allen, Scholefield
Bessell, Peter
Brown, Hugh D. (G'gow, Provan)


Anderson, Donald
Bidwell, Sydney
Brown, Bob (N'c'tle-upon-Tyne, W)


Archer Peter
Binns, John
Brown, R. W. (Shoreditch &amp; F'bury)


Armstrong, Ernest
Bishop, E. S.
Buchan, Norman


Atkins, Ronald (Preston, N.)
Blackburn, F.
Buchanan, Richard (G'gow, Sp'burn)


Atkinson, Norman (Tottenham)
Blenkinsop, Arthur
Butler, Herbert (Hackney, C.)


Bagier, Gordon A. T.
Boardman, H.
Cant, R. B.


Barnes, Michael
Booth, Albert
Coe, Denis


Barnett, Joel
Boston, Terence
Concannon, J. D.




Corbet Mrs. Freda
Howarth, Robert (Bolton, E.)
Oswald, Thomas


Craddock, George (Bradford, S.)
Howell, Denis (Small Heath)
Owen, Dr. David (Plymouth, S'tn)


Crawshaw, Richard
Howie, W.
Owen, Will (Morpeth)


Crossman, Rt. Hn. Richard
Hughes, Emrys (Aryshire, S.)
Page, Derek (King's Lynn)


Cullen, Mrs. Aice
Hughes, Roy (Newport)
Palmer, Arthur


Dalyell, Tam
Hunter, Adam
Pardoe, John


Davidson, Arthur (Accrington)
Hynd, John
Park, Trevor


Davidson, James (Aberdeenshire, W.)
Jackson, Peter M. (High Peak)
Parker, John (Dagenham)


Davies, Dr. Ernest (Stretford)
Jeger, Mrs. Lena (H'b'n&amp;St. P'cras, S.)
Parkyn, Brian (Bedford)


Davies, Harold (Leek)
Jenkins, Hugh (Putney)
Pavitt, Laurence


Davies, Ifor (Gower)
Johnson, Carol (Lewisham, S.)
Pearson, Arthur (Pontypridd)


Davies, Robert (Cambridge)
Johnson, James (K'ston-on-Hull, w.)
Pentland, Norman


de Freitas, Sir Geoffrey
Johnston, Russell (Inverness)
Perry, Ernest G. (Battersea, S.)


Dempsey, James
Jones, Dan (Burnley)
Perry, George H. (Nottingham, S.)


Dewar, Donald
Jones, J. Idwal (Wrexham)
Prentice, Rt. Hn. R. E.


Diamond, Rt. Hn. John
Kelley, Richard
Price, Christopher (Perry Barr)


Doig, Peter
Kenyon, Clifford
Price, Thomas (Westhoughton)


Dunn, James A.
Kerr, Mrs. Anne (R'ter &amp; Chatham)
Price, William (Rugby)


Dunnett, Jack
Kerr, Dr. David (W'worth, Central)
Probert, Arthur


Dunwoody, Mrs. Gwyneth (Exeter)
Kerr, Russell (Feltham)
Rankin, John


Dunwoody, Dr. John (F'th &amp; C'b'e)
Lawson, George
Redhead, Edward


Eadie, Alex
Leadbitter, Ted
Rees, Merlyn


Edwards, Rt. Hn. Ness (Caerphilly)
Lee, John (Reading)
Rhodes, Geoffrey


Ellis, John
Lewis, Arthur (W. Ham, N.)
Roberts, Albert (Normanton)


Ensor, David
Lewis, Ron (Carlisle)
Robertson, John (Paisley)


Evans, Albert (Islington, S. W.)
Lipton, Marcus
Rogers, George (Kensington, N.)


Evans, Gwynfor (C'marthen)
Lomas, Kenneth
Rose, Paul


Evans, Ioan L. (Birm'h'm, Yardley)
Loughlin, Charles
Ross, Rt. Hn. William


Faulds, Andrew
Luard, Evan
Rowland, Christopher (Meriden)


Fernyhough, E.
Lubbock, Eric
Rowlands, E. (Cardiff, N.)


Finch, Harold
Lyon, Alexander W. (York)
Sheldon, Robert


Fitch, Alan (Wigan)
Lyons, Edward (Bradford, E.)
Shore, Peter (Stepney)


Floud, Bernard
McBride, Neil
Silkin, Rt. Hn. John (Deptford)


Foley, Maurice
McCann, John
Silkin, Hn. S. C. (Dulwich)


Foot, Michael (Ebbw Vale)
MacDermot, Niall
Silverman, Julius (Aston)


Ford, Ben
MacDonald, A. H.
Slater, Joseph


Forrester, John
McGuire, Michael
Snow, Julian


Fowler, Gerry
McKay, Mrs. Margaret
Spriggs, Leslie


Fraser, John (Norwood)
Mackenzie, Alasdair (Ross&amp;Crom'ty)
Steel, David (Roxburgh)


Fraser, Rt. Hn. Tom (Hamilton)
Mackenzie, Gregor (Rutherglen)
Steele, Thomas (Dunbartonshire, W.)


Galpern, Sir Myer
Mackintosh, John P.
Summerskill, Hn. Dr. Shirley


Gardner, Tony
Maclennan, Robert
Thomas, George (Cardiff, W.)


Garrett, W. E.
McMillan, Tom (Glasgow, C.)
Thornton, Ernest


Garrow, Alex
McNamara, J. Kevin
Thorpe, Jeremy


Ginsburg, David
MacPherson, Malcolm
Tinn, James


Gourlay, Harry
Mahon, Peter (Preston, S.)
Tuck, Raphael


Gray, Dr. Hugh (Yarmouth)
Mahon, Simon (Bootle)
Varley, Eric G.


Gregory, Arnold
Manuel, Archie
Wainwright, Edwin (Dearne Valley)


Grey, Charles (Durham)
Mapp, Crarles
Wainwright, Richard (Colne Valley)


Griffiths, David (Rother Valiey)
Marquand, David
Walker, Harold (Doncaster)


Griffiths, Rt. Hn. James (Llanelly)
Marsh, Rt. Hn. Richard
Watkins, David (Consett)


Hale, Leslie (Oldham, W.)
Mason, Roy
Watkins, Tudor (Brecon &amp; Radnor)


Hamilton, James (Bothwell)
Mellish, Robert
Weitzman, David


Hamilton, William (Fife, W.)
Mendelson, J, J.
Wellbeloved, James


Hamling, William
Millan, Bruce
Whitaker, Ben


Hannan, William
Miller, Dr. M. S.
Wilkins, W. A.


Harrison, Walter (Wakefield)
Milne, Edward (Blyth)
Williams, Alan Lee (Hornchurch)


Haseldine, Norman
Mitchell, R. C. (S'th'pton, Test)
Williams, Clifford (Abertillery)


Heffer, Eric S.
Morris, Alfred (Wythenshawe)
Williams, Mrs. Shirley (Hitchin)


Henig, Stanley
Morris, John (Aberavon)
Willis, George (Edinburgh, E.)


Herbison, Rt. Hn. Margaret
Neal, Harold
Winterbottom, R. E.


Hilton, W. S.
Norwood, Christopher
Woodburn, Rt. Hn. A.


Hooley, Frank
Oakes, Cordon
Yates, Victor


Hooson, Emyln
Ogden, Eric



Homer, John
O'Malley, Brian
TELLERS FOR THE AYES:


Houghton, Rt. Hn. Douglas
Orbach, Maurice
Mr. Charles R. Morris and


Howarth, Harry (Wellingborough)
Orme, Stanley
Mr. Harper.




NOES


Alison, Michael (Barkston Ash)
Braine, Bernard
Corfield, F. V.


Allason, James (Kernel Hempstead)
Brewis, John
Costain, A. P.


Astor, John
Brinton, Sir Tatton
Craddock, Sir Beresford (Spelthorne)


Awdry, Daniel
Byran, Paul
Crowder, F. P.


Baker, W. H. K.
Buchanan-Smith, Alick (Angus, N.&amp;M)
Cunningham, Sir Knox


Balniel, Lord
Buck, Antony (Colchester)
Dalkeith, Earl of


Barber, Rt. Hn. Anthony
Campbell, Gordon
Dance, James


Batsford, Brian
Carlisle, Mark
Dean, Paul (Somerset, N.)


Bell, Ronald
Carr, Rt. Hn. Robert
Deedes, Rt. Hn. W. F. (Ashford)


Berry, Hn. Anthony
Channon, H. P. G.
Dodds-Parker, Douglas


Biffen, John
Chichester-Clark, R.
Doughty, Charles


Biggs-Davison, John
Clark, Henry
Eden, Sir John


Black, Sir Cyril
Clegg, Walter
Elliot, Capt. Walter (Carshalton)


Blaker, Peter
Cooke, Robert
Errington, Sir Eric


Bossom, Sir Clive
Cooper-Key, Sir Neill
Eyre, Reginald







Farr, John
King, Evelyn (Dorset, S.)
Pounder, Rafton


Fortescue, Tim
Kirk, Peter
Powell, Rt. Hn. J. Enoch


Foster, Sir John
Knight, Mrs. Jill
Price, David (Eastleigh)


Gilmour, Ian (Norfolk, C.)
Lancaster, Col. C. G.
Rees-Davies, W. R.


Gilmour, Sir John (Fife, E.)
Langford-Holt, Sir John
Renton, Rt. Hn. Sir David


Glover, Sir Douglas
Lewis, Kenneth (Rutland)
Ridley, Hn. Nicholas


Glyn, Sir Richard
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Rippon, Rt. Hn. Geoffrey


Goodhart, Philip
Loveys, W. H.
Roots, William


Goodhew, Victor
McAdden, Sir Stephen
Rossi, Hugh (Hornsey)


Grant, Anthony
MacArthur, Ian
Russell, Sir Ronald


Grant-Ferris, R.
Maclean, Sir Fitzroy
Scott, Nicholas


Gresham Cooke, R.
Maginnis, John E.
Sharples, Richard


Grieve, Percy
Maude, Angus
Shaw, Michael (Sc'b'gh &amp; Whitby)


Griffiths, Eldon (Bury St. Edmunds)
Mawby, Ray
Sinclair, Sir George


Hall, John (Wycombe)
Maxwell-Hyslop, R. J.
Smith, John


Hall-Davis, A. G. F.
Maydon, Lt.-Cmdr. S. L. C.
Stoddart-Scott, Col. Sir M. (Ripon)


Harris, Reader (Heston)
Mills, Peter (Torrington)
Summers, Sir Spencer


Harrison, Brian (Maldon)
Mills, Stratton (Belfast, N.)
Taylor, Sir Charles (Eastbourne)


Harrison, Col. Sir Harwood (Eye)
Mitchell, David (Basingstoke)
Taylor, Edward M. (G'gow, Cathcart)


Harvey, Sir Arthur Vere
Monro, Hector
Temple, John M.


Hastings, Stephen
More, Jasper
Thatcher, Mrs. Margaret


Heald, Rt. Hn. Sir Lionel
Morrison, Charles (Devizes)
Turton, Rt. Hn. R. H.


Heath, Rt. Hn. Edward
Mott-Radclyffe, Sir Charles
van Straubenzee, W. R.


Heseltine, Michael
Munro-Lucas-Tooth, Sir Hugh
Walker, Peter (Worcester)


Higgins, Terence L.
Murton, Oscar
Wall, Patrick


Hiley, Joseph
Nabarro, Sir Gerald
Webster, David


Hill, J. E. B.
Nicholls, Sir Harmar
Wells, John (Maidstone)


Hobson, Rt. Hn. Sir John
Noble, Rt. Hn. Michael
Whitelaw, William


Holland, Philip
Onslow, Cranley
Wills Sir Gerald (Bridgwater)


Hordern, Peter
Osborn, John (Hallam)
Wilson, Geoffrey (Truro)


Hunt, John
Osborne, Sir Cyril (Louth)
Wolrige-Gordon, Patrick


Hutchison, Michael Clark
Page, Graham (Crosby)
Wood, Rt. Hn. Richard


Jenkin, Patrick (Woodford)
Page, John (Harrow, W.)
Worsley, Marcus


Jennings, J. C. (Burton)
Pearson, Sir Frank (Clitheroe)
Younger, Hn, George


Johnson Smith, G. (E. Grinstead)
Percival, Ian



Jopling, Michael
Peyton, John
TELLERS FOR THE NOES:


Joseph, Rt. Hn. Sir Keith
Pike, Miss Mervyn
Mr. Pym and Mr. R. W. Elliott.


Kimball, Marcus
Pink, R. Bonner

Question put accordingly, That the Bill be now read a Second time: —

The House divided: Ayes 233, Noes 151.

Division No. 194.]
AYES
[10.10 p.m.


Abse, Leo
Craddock, George (Bradford, S.)
Gardner, Tony


Albu, Austen
Crawshaw, Richard
Garrett, W. E.


Allaun, Frank (Salford, E.)
Crossman, Rt. Hn. Richard
Carrow, Alex


Alldritt, Walter
Cullen, Mrs. Alice
Ginsberg, David


Allen, Scholefield
Dalyell, Tam
Gourlay, Harry


Anderson, Donald
Davidson, Arthur (Accrington)
Gray, Dr. Hugh (Yarmouth)


Archer, Peter
Davidson, James (Aberdeenshire, W.)
Gregory, Arnold


Armstrong, Ernest
Davies, Dr. Ernest (Stretford)
Grey, Charles (Durham)


Atkins, Ronald (Preston, N.)
Davies, Harold (Leek)
Griffiths, David (Rother Valley)


Atkinson, Norman (Tottenham)
Davies, Ifor (Gower)
Griffiths, Rt. Hn. James (Llanelly)


Bagier, Gordon A. T.
Davies, Robert (Cambridge)
Hale, Leslie (Oldham, W.)


Barnes, Michael
de Freitas, Sir Geoffrey
Hamilton, James (Bothwell)


Barnett, Joel
Dempsey, James
Hamilton, William (Fife, W.)


Baxter, William
Dewar, Donald
Hamling, William


Beaney, Alan
Diamond, Rt. Hn. John
Hannan, William


Bence, Cyril
Doig, Peter
Harrison, Walter (Wakefield)


Bennett, James (G'gow, Bridgeton)
Dunn, James A.
Haseldine, Norman


Bessell, Peter
Dunnett, Jack
Heffer, Eric S.


Bidwell, Sydney
Dunwoody, Mrs. Gwyneth (Exeter)
Henig, Stanley


Binns, John
Dunwoody, Dr. John (F'th &amp; C'b'e)
Herbison, Rt. Hn. Margaret


Bishop, E. S.
Eadie, Alex
Hilton, W. S.


Blackburn, F.
Edwards, Rt. Hn. Ness (Caerphilly)
Hooley, Frank


Blenkinsop, Arthur
Ellis, John
Hooson, Emlyn


Boardman, H.
Ensor, David
Homer, John


Booth, Albert
Evans, Albert (Islington, S. W.)
Houghton, Rt. Hn. Douglas


Boston, Terence
Evans, Gwynfor (C'marthen)
Howarth, Harry (Wellingborough)


Boyden, James
Evans, Ioan L. (Birm'h'm, Yardley)
Howarth, Robert (Bolton, E.)


Braddock, Mrs. E. M.
Faulds, Andrew
Howell, Denis (Small Heath)


Bray, Dr. Jeremy
Fernyhough, E.
Howie, W.


Brooks, Edwin
Finch, Harold
Hughes, Emrys (Ayrshire, S.)


Brown, Hugh D, (G'gow, Provan)
Fitch, Alan (Wigan)
Hughes, Roy (Newport)


Brown, Bob (N'c'tle-upon-Tyno, W.)
Floud, Bernard
Hunter, Adam


Brown, R. W. (Shoreditch &amp; F'bury)
Foley, Maurice
Hynd, John


Buchan, Norman
Foot, Michael (Ebbw Vale)
Jackson, Peter M. (High Peak)


Buchanan, Richard (G'gow, Sp'burn)
Ford, Ben
Jeger, Mrs. Lena (H'b'n&amp;St. P'cras, S.)


Butler, Herbert (Hackney, C.)
Forrester, John
Jenkins, Hugh (Putney)


Cant, R. B.
Fowler, Gerry
Johnson, Carol (Lewisham, S.)


Coe, Denis
Fraser, John (Norwood)
Johnson, James (K'ston-on-Hull. W.)


Concannon, J. D
Fraser, Rt. Hn. Tom (Hamilton)
Johnston, Russell (Inverness)


Corbet, Mrs. Freda
Galpern, Sir Meyer
Jones, Dan (Burnley)




Jones, J. Idwal (Wrexham)
Millan, Bruce
Rose, Paul


Kelley, Richard
Miller, Dr. M. S.
Ross, Rt. Hn. William


Kenyon, Clifford
Milne, Edward (Blyth)
Rowland, Christopher (Meriden)


Kerr, Mrs. Anne (R'ter &amp; Chatham)
Mitchell, R. C. (S'th'pton, Test)
Rowlands, E. (Cardiff, N.)


Kerr, Dr. David (W'worth, Central)
Morris, Alfred (Wythenshawe)
Sheldon, Robert


Kerr, Russell (Feltham)
Morris, John (Aberavon)
Shore, Peter (Stepney)


Lawson, George
Neal, Harold
Silkin, Rt. Hn. John (Deptford)


Lee, John (Reading)
Norwood, Christopher
Silkin, Hn. S. C. (Dulwich)


Lewis, Arthur (W. Ham, N.)
Oakes, Gordon
Silverman, Julius (Aston)


Lewis, Ron (Carlisle)
Ogden, Eric
Slater, Joseph


Lipton, Marcus
O'Malley, Brian
Snow, Julian


Lomas, Kenneth
Orbach, Maurice
Spriggs, Leslie


Loughlin, Charles
Orme, Stanley
Steel, David (Roxburgh)


Luard, Evan
Oswald, Thomas
Steele, Thomas (Dunbartonshire, W.)


Lubbock, Eric
Owen, Dr. David (Plymouth, S'tn)
Thomas, George (Cardiff, W.)


Lyon, Alexander W. (York)
Owen, Will (Morpeth)
Thornton, Ernest


Lyons, Edward (Bradford, E.)
Page, Derek (King's Lynn)
Thorpe, Jeremy


McBride, Neil
Palmer, Arthur
Tinn, James


McCann, John
Pardoe, John
Varley, Eric G.


MacDermot, Niall
Park, Trevor
Wainwright, Edwin (Dearne Valley)


Macdonald, A. H.
Parker, John (Dagenham)
Wainwright, Richard (Colne Valley)


McGuire, Michael
Parkyn, Brian (Bedford)
Walker, Harold (Doncaster)


McKay, Mrs. Margaret
Pavitt, Laurence
Watkins, David (Consett)


Mackenzie, Alasdair (Ross&amp;Crom'ty)
Pearson, Arthur (Pontypridd)
Watkins, Tudor (Brecon &amp; Radnor)


Mackenzie, Gregor (Rutherglen)
Pentland, Norman
Weitzman, David


Mackintosh, John P.
Perry, Ernest G. (Battersea, S.)
Wellbeloved, James


Maclennan, Robert
Perry, George H. (Nottingham, S.)
Whitaker, Ben


McMillan, Tom (Glasgow, C.)
Prentice, Rt. Hn. R. E.
Wilkins, W. A.


McNamara, J. Kevin
Price, Christopher (Perry Barr)
Williams, Alan Lee (Hornchurch)


MacPherson, Malcolm
Price, Thomas (Westhoughton)
Williams, Clifford (Abertillery)


Mahon, Peter (Preston, S.)
Price, William (Rugby)
Williams, Mrs. Shirley (Hitchin)


Mahon, Simon (Bootle)
Probert, Arthur
Willis, George (Edinburgh, E.)


Manuel, Archie
Rankin, John
Winterbottom, R. E.


Mapp, Charles
Redhead, Edward
Woodburn, Rt. Hn. A.


Marquand, David
Rees, Merlyn
Yates, Victor


Marsh, Rt. Hn. Richard
Rhodes, Geoffrey



Mason, Roy
Roberts, Albert (Normanton)
TELLERS FOR THE AYES:


Mellish, Robert
Robertson, John (Paisley)
Mr. Charles R. Morris and


Mendelson, J. J.
Rogers, George (Kensington, N.)
Mr. Harper.




NOES


Alison, Michael (Barkston Ash)
Eyre, Reginald
Langford-Holt, Sir John


Allason, James (Hemel Hempstead)
Farr, John
Lewis, Kenneth (Rutland)


Astor, John
Fortescue, Tim
Loveys, W. H.


Awdry, Daniel
Foster, Sir John
McAdden, Sir Stephen


Baker, W. H. K.
Gilmour, Ian (Norfolk, C.)
MacArthur, Ian


Balniel, Lord
Gilmour, Sir John (Fife, E.)
Maclean, Sir Fitzroy


Barber, Rt. Hn. Anthony
Glover, Sir Douglas
Maginnis, John E.


Batsford, Brian
Glyn, Sir Richard
Maude, Angus


Bell, Ronald
Goodhart, Philip
Mawby, Ray


Berry, Hn. Anthony
Goodhew, Victor
Maxwell-Hyslop, R. J.


Biffen, John
Grant, Anthony
Maydon, Lt.-Cmdr. S. L. C.


Biggs-Davison, John
Grant-Ferris, R.
Mills, Peter (Torrington)


Black, Sir Cyril
Gresham Cooke, R.
Mills, Stratton (Belfast, N.)


Blaker, Peter
Grieve, Percy
Mitchell, David (Basingstoke)


Bossom, Sir Clive
Griffiths, Eldon (Bury St. Edmunds)
Monro, Hector


Brame, Bernard
Hall, John (Wycombe)
More, Jasper


Brewis, John
Hall-Davis, A. G. F.
Morrison, Charles (Devizes)


Brinton, Sir Tatton
Harris, Reader (Heston)
Mott-Radcliffe, Sir Charles


Bryan, Paul
Harrison, Brian (Maldon)
Munro-Lucas-Tooth, Sir Hugh


Buchanan-Smith, Alick (Angus, N&amp;M)
Harrison, Col. Sir Harwood (Eye)
Murton, Oscar


Buck, Antony (Colchester)
Harvey, Sir Arthur Vere
Nabarro, Sir Gerald


Campbell, Gordon
Hastings, Stephen
Nicholls, Sir Harmar


Carlisle, Mark
Heald, Rt. Hn. Sir Lionel
Noble, Rt. Hn. Michael


Carr, Rt. Hn. Robert
Heath, Rt. Hn. Edward
Onslow, Cranley


Channon, H. P. G.
Heseltine, Michael
Osborn, John (Hallam)


Chichester-Clark, R.
Higgins, Terrence L.
Osborne, Sir Cyril (Louth)


Clark, Henry
Hiley, Joseph
Page, Graham (Crosby)


Clegg, Walter
Hill, J. E. B.
Page, John (Harrow, W.)


Cooke, Robert
Hobson, Rt. Hn. Sir John
Pearson, Sir Frank (Clitheroe)


Cooper-Key, Sir Neill
Holland, Philip
Percival, Ian


Corfield, F. V.
Hordern, Peter
Peyton, John


Costain, A. P.
Hunt, John
Pike, Miss Mervyn


Craddock, Sir Beresford (Spelthorne)
Hutchison, Michael Clark
Pink, R. Bonner


Crowder, F. P.
Jenkin, Patrick (Woodford)
Pounder, Rafton


Cunningham, Sir Knox
Jennings, J. C. (Burton)
Powell, Rt. Hn. J. Enoch


Dalkeith, Earl of
Johnson Smith, G. (E. Grintstead)
Price, David (Eastleigh)


Dance, James
Jopling, Michael
Rees-Davies, W. R.


Dean, Paul (Somerset, N.)
Joseph, Rt. Hn. Sir Keith
Renton, Rt. Hn. Sir David


Deedes, Rt. Hn. W. F. (Ashford)
Kimball, Marcus
Ridley, Hn. Nicholas


Dodds-Parker, Douglas
King, Evelyn (Dorset, S.)
Rippon, Rt. Hn. Geoffrey


Doughty, Charles
Kirk, Peter
Roots, William


Eden, Sir John
Knight, Mrs. Jill
Scott, Nicholas


Elliot, Capt. Walter (Carshalton)
Lancaster, Col. C. C.
Sharples, Richard







Shaw, Michael (Sc'b'gh &amp; Whitby)
Turton, Rt. Hn. R. H.
Wilson, Geoffrey (Truro)


Sinclair, Sir George
van Straubenzee, W. R.
Wolrige-Gordon, Patrick


Smith, John
Walker, Peter (Worcester)
Wood, Rt. Hn. Richard


Stoddart-Scott, Col. Sir M. (Ripon)
Wall, Patrick
Worsley, Marcus


Summers, Sir Spencer
Webster, David
Younger, Hn. George


Taylor, Sir Charles (Eastbourne)
Wells, John (Maidstone)



Taylor, Edward M.(G'gow, Cathcart)
Whitelaw, William
TELLERS FOR THE NOES:


Temple, John M.
Wills, Sir Gerald (Bridgwater)
Mr. Pym and Mr. R. W. Elliott.


Thatcher, Mrs. Margaret

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

BUSINESS OF THE HOUSE

Ordered, That the Proceedings on the Expiring Laws Continuance Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Lawson.]

NATIONAL COAL BOARD (ADDITIONAL POWERS) [MONEY]

[Queen's Recommendation signified]

Considered in Committee under Standing Order No. 88 (Money Committees).

[Sir ERIC FLETCHER in the Chair]

Resolved,
That, for the purposes of any Act of the present Session to confer on the National Coal Board certain powers with respect to petroleum within the meaning of the Petroleum (Production) Act 1934, it is expedient to authorise any increases in the sums which by or under any enactment are to be or may be issued out of the Consolidated Fund, raised by borrowing, or paid into the Exchequer which may result from the exercise by the Board of those powers.—[Mr. Marsh.]

Resolution to be reported.

Report to be received Tomorrow.

EXPIRING LAWS CONTINUANCE BILL

Read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Charles R. Morris.)

Committee Tomorrow.

EXPIRING LAWS CONTINUANCE [MONEY]

[Queen's Recommendation signified]

Considered in Committee under Standing Order No. 88 (Money Committees).

[Sir ERIC FLETCHER in the Chair]

Resolved,
That, for the purposes of any Act of the present Session to continue certain expiring laws, it is expedient to authorise the payment out of moneys provided by Parliament of such expenses as may be occasioned by the continuance of section 3 of the Emergency Laws (Repeal) Act 1959 and Part I of, and Schedule 1 to, the Commonwealth Immigrants Act 1962 till the end of December 1967, and of Part VII of the Licensing Act 1964 till the end of March 1968, being expenses which under any Act are to be paid out of such moneys.—[Mr. MacDermot.]

Resolution to be reported.

Report to be received Tomorrow.

BUILDING CONTROL (COST LIMIT EXEMPTION)

10.25 p.m.

The Minister of Public Building and Works (Mr. Reginald Prentice): I beg to move,
That the Building Control (Cost Limit Exemption) Order 1966 (S.I., 1966, No. 997), dated 9th August, 1966, a copy of which was laid before this House on 10th August, be approved.
The effect of this Order is that, as from 11th August, the cost limit below which work is exempt from control under the Building Control Act is reduced from £100,000 to £50,000. In other words, a building licence is required for works of construction or alterations costing £50,000 or more if they were not started or contracted for before 11th August and if they are not exempt on other grounds. The House will remember from the terms of the Building Control Act that the majority of building operations are exempt on other grounds. This Act does not apply to housing, public authority building, industrial building, or building in development areas. It applies to less than 10 per cent. of building activity over all.
The effect of reducing the limit from £100,000 to £50,000 is, in statistical terms, approximately this. First, I should perhaps say that more than once my hon. Friends and I have said in relation to the Building Control Act that when its main provisions applied control over £100,000 it was likely to affect in one year something like 500 building projects and building activity amounting to £180 million.
Today is perhaps a convenient day for checking on those figures, because it was a year ago today that my right hon. Friend the Member for Leeds, West (Mr. C. Pannell) first invited applications under this system. We find that the total value of applications received during the 12 months up to today was £180·1 million, which shows that the estimate was very good indeed. I should, perhaps, qualify this and point out that since 11th August it has included some projects between £50,000 and £100,000, amounting to £7·4 million altogether. The

number of applications has been 623, of which 102 have been in the lower bracket and 521 in the higher bracket.
The scope of the Act as it was before the Order was made was approximately, as borne out by the figures, that it affected about 500 building projects a year to the total value of £180 million. The effect of this Order is to increase the scope to include about twice as many building projects, the increase being from about 500 to about 1,000 a year. In value the increase will be from £180 million to about £220 million a year. The Order is in very simple terms and I do not think I need dwell upon it. I emphasise that it is in no sense retrospective. The House is sensitive on this point, and rightly so. We had talks about it in connection with the Act, and I think the House would not have wished this Order to be retrospective in any sense.
We perhaps ran a slight risk here in that the intention to introduce the Order was announced by the Prime Minister on 20th July and there was a gap from then to 11th August in which there might have been attempts to forestall the Order, but this did not happen on any significant scale. The case for the Order is simple and again one with which the House will be familiar. It was part of the package of economic measures announced by the Prime Minister on 20th July and it was part of the purpose of those measures to reduce demand in the domestic economy.
I should have thought it was logical and made good sense to say that, in so far as there had to be a reduction in demand and in so far as that reduction in demand had to affect the construction industries to some extent, it was reasonable that the construction industry should be curtailed to some extent in the private sector as well as in the public sector. This is a view which I know is not shared on the benches opposite.
Hon. Members opposite, I understand, propose to vote against this Order, which is perhaps logical in the sense that they voted against all stages of the Building Control Act. But they have to face the logic of their position, which is not a widely held position in the country. They are saying that if and when economic


measures are needed in relation to building they would apply them only in the public sector and not in the private sector at all. They would be prepared to hold back on primary schools or hospitals but not on private proposals for office development or development of shopping centres and the like. Our view is that control ought to be a more flexible instrument and ought to be applied where necessary both in the private and public sectors. Therefore, I think that the decision to lay this Order—a decision which was part of the package of economic measures announced on 20th July—was a logical and good part of that package.
There is one further point that I should make. We could have proceeded to increase the degree of control without laying the Order. We could have been content with keeping the level of £100,000 and simply licensing fewer of the projects that came forward costing over £100,000. But I put it to the House that it was sensible, in view of the intention to have a larger degree of control, to give ourselves this greater amount of flexibility. The present policy of the Government—the policy that has operated since July to which I have referred and to which my hon. Friend the Parliamentary Secretary has referred on other occasions—is to license about half—in practice it is a little more than half—of the projects which are coming forward.
Therefore, I think it is better to be able, where it is in the public interest, to refuse some within the bracket of £50,000 to £100,000 and thereby to be able to allow some extra ones within the levels above £100,000 which otherwise would have to be refused. Within the figures that I have already given, this is only a modest measure and it will have only a modest effect on those projects above £100,000 but it will have some effect, and it is useful to that extent.
The House may be interested to know that in the period since the Order was laid the number of projects authorised have been 91 with a total value of £17·6 million, and within that total there have been 37 with a total value of £2·7 million which come within the bracket of £50,000 to £100,000. The total refused overall is 60 projects costing £10·3 million and within these there have been 18 projects

costing £1·3 million in the lower bracket. This illustrates the point that this extra flexibility has had the modest effect of giving us the power to take a more liberal view of projects in the higher range.
It has one other advantage, in that when we are speaking of projects within the range of £50,000 to £100,000 we are speaking of projects which will normally have a shorter building time. Therefore, in so far as we refuse some projects within that bracket, we shall have an effect on construction activity which is shorter in time than if we were refusing projects of the same value in the higher bracket. This again is useful in the sense that one thing that concerns all of us is the fear that because economic changes come along at such a pace decisions made in the construction industry in one year may not be appropriate in the following year.
This is a case logically for the whole Act and the policy under it although the hon. Gentleman has never seen that and always seemed to argue the reverse. That because planning is difficult we should not plan seems to be his outlook on this. [HON. MEMBERS: "Hear, hear."] For this reason, it is marginally better to exercise part of the control within the lower bracket rather than exercise the whole above the level of £100,000.
I therefore submit that we are making a logical use of the Act in a period when the economic situation has made it necessary for us to exercise a fairly high degree of restraint. The building industry accepted the Act without any noticeable protest, and has accepted this extension in the same way. The kind of opposition which we heard from hon. Members opposite during the passage of the Act has found no echo outside, and if they want to go through the motions of opposing this Order I am sure that their action will appear to those outside to be as irrelevant as their attitude to the Act itself.

10.37 p.m.

Mr. R. Chichester-Clark: Many of us must have listened to the Minister tonight with the feeling, "Here we go again". There must be a number of deaf ears on the Treasury Bench if they have not heard from the industry the objections to the Measure with which we are now dealing. When the deplorable Building Control Act was


approaching the end of its unhappy course through the House, we hoped that we had heard the last of that fatuous Measure, but before it had even cleared the House the Government had the effrontery to announce the tightening of the squeeze which was only in existence by retrospective threat.
There have been two Building Control Bills before the House in recent months, and both had no justification, though there have been many different attempts at justification by many different spokesmen. Sometimes we were told that it was to prevent overheating, sometimes to correlate demand and capacity, and sometimes to make a direct impact on the balance of payments. This last was the Prime Minister's contribution on 20th July. The Building Control Act itself, which we always said was an irrelevant and damaging Measure, passed through the House by majority rather than merit, and the Order now before us is one of the most meaningless political gestures ever made in the House by any Minister of Public Building and Works, and should not pass through the House.
The new control began on 11th August, but was not retrospective to the Prime Minister's statement of 20th July. It is therefore concerned only with building which had neither begun nor been contracted for before 11th August. Therefore, it cannot have the slightest effect upon the construction industry until 1967, except to add to the veil of gloom which has overhung the industry since 1965, and to sap further the confidence so badly needed.
The Minister might have told us—I rather think that he did—that the Government's new cuts would have had the immediate effect of discouraging developers from going ahead at the planning stage, and he suggested tonight that attempts had not been made to forestall the Order. In fact, I suspect that quite a number of professional developers believed in advance that these measures would come forward in the 20th July statement, and placed contracts worth between £50,000 and £100,000 immediately to avoid any new restrictions.
Later the Government appeared to be trying to take some virtue for the larger volume of orders reported in the building

industry, even though it was premeditation of the Government's actions that may well have brought about a larger volume of so-called "inessential" development than might otherwise have occurred. During the Committee stage of the Building Control Bill, my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) gave warning that that sort of thing could happen. Unfortunately, the warning was not heeded.
I said earlier that the Order would not have any effect on the industry till 1967, and the Minister did not challenge that tonight. Well he might not, because, apart from what he told us here tonight, he himself said very sagely on 2nd May:
… We are not discussing the state of the construction industry now. Any decision taken now and any taken in the months ahead when the Bill becomes law will really be affecting the pressure on the construction industry in 1967 and 1968."—[OFFICIAL REPORT, 2nd May, 1966; Vol. 727, c. 1242.]
He is absolutely right about that. How often have we said in the House that the building industry may be a good indicator but it is the worst of all regulators because of the time which measures of this kind take to bite.
What, then, are we doing with this Order? "Anticipating a future crisis"? The Parliamentary Secretary will remember those words. Or just fiddling with the capacity of the industry? Does not the Prime Minister listen to his colleagues? Did he really believe on 20th July that the action we are now discussing would make a direct impact on our balance of payments? Certainly, the Government spokesman in the other place last Thursday seemed to think so, as, I think, the Minister did tonight.
But even if the Prime Minister does not mean what he says—a proposition which sometimes commands some support in the House—and even if the real reason is something to do with regulating the capacity of the industry, we are bound to ask: what on earth was the Government spokesman, Lord Hilton of Upton, talking about in the other place on 12th July last when he said that the machinery provided by the Building Control Bill
will not be used to restrict for restriction's sake; it will be used to defer work when the capacity of the industry is insufficient to carry out all it is asked to do".—[OFFICIAL REPORT, House of Lords, 12th July, 1966; Vol. 276, c. 85.]


That was what was said on 12th July. On 20th July we got the Prime Minister's measures. Just what dramatic change had taken place in the capacity of the industry in one short week? I hope that we shall have a straight answer to that question tonight. So far, we have had none.
The magazine Building got rather closer to the truth in saying that, as regards the contracting and labour employing side of the industry, these further restrictions will have little effect for six or more months to come, adding that it was difficult not to discern in the Government's renewed reliance on the building industry as an economic regulator an element of window-dressing.
May we have a straight answer tonight? What is the reason? Why is this ridiculous Order before us? Is it in anticipation of a future economic crisis? Was the Parliamentary Secretary on one occasion as prophetic as I suspect he now thinks he was? Was it an invisible act of God which invisibly changed the whole capacity of the industry in one week? Or was it just window-dressing?
The Order represents the tightening of one aspect of the Government's ever-increasing nexus of controls on the industry. At the same time, they have brought the whole of South-East England and the East and West Midlands under the scope of the Control of the Office and Industrial Development Act, 1965, and they are now cutting back on £55 million of allegedly inessential public sector building and £95 million of work for nationalised industries in 1967–68.
All this amounts to an ever harsher squeeze on the industry, and this has been reflected in the further deterioration in builders' order books, as was shown in the recent state of trade inquiry by the National Federation of Building Trade Employers completed on 21st October. Replies from 419 firms, a cross-section both by size of firm and by location, showed that inquiries, work in progress and work ready to start are all continuing to fall away. Almost 60 per cent. of the firms replying said that they would carry out less work in 1967 than they will in 1966. That is a pretty disturbing prospect.
But there is another disturbing factor here. The reports of the earlier inquiries of the N.F.B.T.E. suggested that there

was one element of Government policy, at least, which might be meeting with some success. It appeared from earlier inquiries says the N.F.B.T.E., that the central policy of steering work to the development areas was having some of the desired effects. But not this time, not in this survey. It now appears that both Scotland and the North-East are sharing in the down-turn. In this connection, the Statist pointed out during the summer some curious features of building licensing which, I am sure, the right hon. Gentleman will note. It showed that office blocks were coming off best and hotels worst—a rather curious situation when we have the Board of Trade dithering about financial assistance on hotels while the right hon. Gentleman's Ministry cuts them back. But that is another point.
It also showed that so far from the development areas receiving favourable treatment, Wales had refused one-quarter of the value in buildings while North-East suffered also as severely with a refusal rate of 21 per cent. In May this year, the Parliamentary Secretary had something to say about the North-East. Perhaps if I quote him I can give this prophet a timely opportunity to wrest back some of the honour he may otherwise lose in his own country. He said:
Apart from the period of a freak blizzard in December last year, unemployment in the building industry has, month by month, been lower in the last winter than for a very long time…. A Labour winter is as good as a Tory summer.
This winter? Would he care to repeat that, amend it or forget all about it? I think that we can best evaluate that prophecy when we read later in the same speech the round declaration:
It is true to say that Labour's management of the economy is succeeding.
Presumably the Government still believe—do they?—that by lowering the cost limit exemption they will in some way be affecting the provision of houses. But it can hardly be claimed that the Building Control Act has so far conspicuously shown any sign of affecting the provision of houses in the right way. In fact, all the signs appear to be to the contrary.
Since the Act began to operate, from 27th July, 1965, the rate of housing starts has dropped very sharply, brick stockpiles have shot up and the state of the housing market is leading to short-time working


and closures. The truth is that, for those who will not learn, history does repeat itself. The country has seen all this before. Even the words are the same. There is a conicidence here worth relating to the House. In 1945, the then Labour Minister of Works said that the House would agree that the housing problem was so urgent that it should be "tackled like a military operation".
In 1947, we were promised 240,000 completions; we got just under 140,000. In 1964 the Prime Minister exhorted
We have pledged ourselves to tackle the housing problem like a wartime operation.
In both 1965 and 1966 we were officially promised 400,000 homes and in both years the target has been lamentably missed. The same words—the same failure—a failure which this Order will do nothing to redeem.
Under Defence Regulation 56A, the post-war Labour Government had control of all works of construction, demolition, repairs and alterations by a strict licensing system. The Conservative Government of 1951–55 steadily dismantled the control system and the final controls were removed with the revocation of 56A in November, 1954. Here I want to call in aid a useful and official verdict on these events. I wonder whether the right hon. Gentleman reads all the official pronouncements which are put out concerning the responsibilities of his and other kindred Government Departments. If so, presumably he does not demur from this statement:
Since building controls were taken off in 1954, output has risen steadily. By the end of 1965 output (by value) was running at an annual rate more than 50 per cent. above the level of 1958.
Truth will out, even from Government sources. This particular oracle is "Fact Sheets on Britain—The Construction Industries", put out by the Central Office of Information in 1966.
But the lesson is not learned and we have new controls and the tightening of the screw with this Order. As after the war, the effects have been and will be felt far beyond the intention and all other construction has suffered and will suffer.
I want to say a word about the way in which this Order has reached us, because the history of its coming has not

only contributed to a loss of vital confidence in the industry but has also added to the growth of cynicism about the conduct of our affairs. On 20th November, 1964, the former Minister of Public Building and Works was asked:
Is it your intention to impose further controls or licensing beyond the halt to office building in the metropolitan area?
He replied:
No … and it is not the Government's intention to impose further controls because we see the industry in a positive, not a negative way. … In any case, to introduce controls would take up Parliamentary time and controls, even if introduced, could not be effective for a 12 month.
As my hon. Friends will remember, we were told that the industry was in a generally satisfactory state of affairs. There is no need to dwell on what actually happened.
Later in the Committee on the Bill we forced out of the Government not only a provision that controls would not affect building projects under £50,000, but also a promise that there would be no immediate lowering of the exemption limit to that figure. The then Minister said:
I can assure the Committee that there is no intention at present to include anything below £100,000."—[OFFICIAL REPORT, Standing Committee E, 1st February, 1966; c. 206.]
Speaking of the £50,000 he said:
This is the figure which we could go down to although we never expect to do so."—[OFFICIAL REPORT, Standing Committee E, 17th February, 1966; c. 430.]
That is what the building industry was led to expect, and yet on 11th August this Order was laid.
Perhaps no comment on this is needed from me, except to recall the Prime Minister's fondness for saying that in politics a week is a long time. For this Government's promises five months is a lifetime.
This Order is a mean and meaningless political gesture. It is irrelevant to the needs and problems of the country. Nothing the Minister has said tonight has done anything to change my views about it, and I advise my hon. Friends to do what they can to throw out this Order with the contempt which it deserves.

10.51 p.m.

Mr. H. P. G. Channon: My hon. Friend the Member for Londonderry (Mr. Chichester-Clark) has


very effectively deployed the arguments against the Order, but I want to ask what are the Government's intentions for the future. When the Order was introduced in another place, we were told categorically by the Government spokesman, Lord Hilton of Upton, that this control would be taken off as soon as possible. I thought that it was most significant that in the Minister's speech this evening we were not told anything of the kind. We are entitled to be told exactly what the Government intentions about the Order are and how long they expect this control to go on, or, if they cannot state a time, and I would quite understand that, what sort of factors would lead them to withdraw the Order and return to the £100,000 limit.
Moving the Order in the other place last week, Lord Hilton said:
… this is regarded not so much as a permanent measure to reshape the control, but rather as a move designed primarily to meet exceptional circumstances.
I thought that that was generally understood. He went on:
… this is a serious matter and the control will not last a moment longer than is necessary."—[OFFICIAL REPORT, House of Lords, 27th October, 1966; Vol. 277, c. 371–5.]
It would have been very helpful to the House if the Minister had repeated those assurances tonight, but, unless we get some information from the Parliamentary Secretary, the conclusion to be drawn will be that those are not the Minister's views.
My hon. Friend pointed out how misleading were the assurances given to the building and construction industries from the very moment that the Government came to office—the assurances given by the Minister's predecessor and the assurances given at all stages of the passage of the Building Control Act in two Parliaments. The building and construction industries have been misled time and time again. I do not blame the Minister personally for this, but if he imagines that there will not be resentment about this treatment, his information is different from mine.
The effect is obvious. Having been misled so many times, not unnaturally the building and construction industries are doubtful about the Government's intention for the future, because they do not know when they will be misled again.

That is one of the gravest features of the Order. As my hon. Friend said, the Order itself cannot affect the balance of payments in any way and the Minister made no pretence of introducing it on the ground of any effect on the balance of payments. If the Parliamentary Secretary alleges that it will have any effect, perhaps he will tell us how.
The purpose of the 20th July measures was to have an effect upon the balance of payments, and I think that it can be claimed that this is so in the case of this Order. My hon. Friend the Member for Londonderry has also shown that the effect of this will be felt in 1967 and maybe 1968. How ironic it is that the Government should be introducing this Order to the House, tightening the squeeze, on a day when the Governor of the Bank of England issues a statement dealing with the easing of the squeeze. How typical of the forward planning of the Labour administration.
I ask the Parliamentary Secretary to answer these two questions. How does he think this Measure will affect the balance of payments and, secondly, what are the Government's intentions about its duration and the factors governing these matters which will lead the Government to remove them? I agree that this is a meaningless Order, brought in purely because it was felt that it would have some party political effect upon the Prime Minister's 20th July measures, and would mollify some of his hon. Friends who would be able to say, "We had a swipe at private building as well." This is typical of the way in which the Government have treated the building and construction industries, and I hope that the House will reject this Order.

10.56 p.m.

Mr. Peter Bessell: We on this bench have always had grave doubts about the part of the Act permitting the Minister to present an Order of this kind to the House. My hon. Friend the Member for Inverness (Mr. Russell Johnston) in the debate which took place on 8th December last, forecast that something of this kind could very well happen, and that the £100,000 limit was something about which the Government might well have second thoughts. When he referred to this, particularly in connection with church buildings, manses and similar properties, the Minister's predecessor


intervened hastily at col. 536 to assure my hon. Friend that £100,000 would amply cover the cost that he had in mind.
During the Second Reading debate on 2nd May, my hon. Friend the Member for Orpington (Mr. Lubbock) expressed considerable doubts about a limit, even of £100,000 and said that he felt that there was likely to be a great deal of confusion, difficulty and evasion. If there is a risk of evasion at a figure of £100,000, that risk is greatly increased by the content of this Order. The hon. Gentleman the Member for Londonderry (Mr. Chichester-Clark) quite properly pointed out to the Minister that his predecessor had virtually given an assurance that the Government had no intention of reducing the limit to £50,000 which had admittedly been discussed in Committee.
I can see no logical reason for bringing this Order before the House. It is nothing more than a piece of window-dressing, designed simply to give the impression to the country that Her Majesty's Government are going to tackle every aspect of the economic crisis, by every means at their disposal. They are quite right, and it is proper that they should do so, but certainly not by means of legislation which will have no effect whatever upon the present economic situation. It has already been pointed out that the effect of this Order upon the economic situation will be meaningless for probably six months——

Sir Harmar Nicholls: For 12 months.

Mr. Bessell: The hon. Gentleman the Member for Peterborough (Sir Harmar Nicholls) says a year, and I think that he is probably right. In which case, do the Government expect that there will be a continuation of the crisis for 12 months? Are they doing a little bit of forward planning on that basis? If that is the case, then the gravity of the present economic situation is much greater than we have been led to believe.
Another aspect of the Order is the uncertainty which it will create in the building industry. At the moment, we have a considerably increased figure of unemployment throughout the country. There are many people available for work, and much of the slack could be taken up

temporarily as well as permanently by the building industry at this time. It would go a long way to alleviate hardship and suffering and, more importantly, it would contribute towards the essential drive for new houses which surely is something which must be close to the heart of any radical Government.

Mr. Eric S. Heffer: Mr. Eric S. Heffer (Liverpool, Walton) rose——

Mr. Bessell: I will give way to the hon. Gentleman in a moment.
If that is the case, they should do nothing to discourage further employment in the industry and add to the uncertainty which the industry is experiencing.

Mr. Heffer: The hon. Member for Bodmin (Mr. Bessell) makes an interesting point. He says that we should take up the slack from other industries; but what would we do for skilled labour in the building industry? It is not possible to erect even industrialised buildings without a high percentage of skilled labour. They are not produced out of a hat.

Mr. Bessell: Within the narrow confines of this debate, I shall be in difficulty if I attempt to answer that in detail. I hope that the hon. Gentleman will accept it from me—in fact, he probably knows better than I do—that, with industrialised building, very little skilled labour is needed. It is possible for much of the slack of unemployment at the moment to be taken up by building projects. I believe that that is something at which the Government should be looking seriously, instead of cutting back and creating this uncertainty.
The uncertainty is real. The building industry is concerned that the Government have provided no target figures for housebuilding for the years 1968 and 1969——

Mr. A. P. Costain: Or 1966.

Mr. Bessell: That is true. But we have one for 1970. The years preceding that are important also. Any further uncertainty in this vital industry will hamper considerably the Government's intention of building more houses.
If we look at the Order and its effects upon the building industry, we must also consider its effects upon potential investors in new construction. If a sum of £100,000


is required for a building project, it is reasonable to assume that that money will be available on the market and that advance planning for its provision will be made by banks, institutions, trusts and other sources of money. If it is a matter of £50,000, forward planning becomes much more difficult, because the amount is too small. I believe that £100,000 is a very narrow limit, in any case, within the framework of forward planning for the financial institutions of the country.
If we know that every project which costs more than £50,000 will be the subject of an application for a special licence, that means that there will not only be delay but real uncertainty about whether that licence will be granted. In the long term, the Government will find that this Measure will do considerable harm to the economy, not only at the level of the building industry but also amongst those institutions which provide capital for additional building and for long-term planning of construction.
I have said that I believe that this Order is needless, unless the Government believe that the economic crisis is insoluble. Even if they believe that and think that the economic crisis will continue for a number of years, I do not believe that the Order, which is further deflation upon deflation, can possibly have other than a damaging effect upon the economy.
It is essential that certain things have priority. One of the priorities is the construction of new buildings, the modernisation of existing buildings, and progress in the construction of new towns and new industrial centres. To bring controls to bear on this type of work at a time when the country should be looking forward to the exciting years of development which lie ahead is a retrogressive step, and I believe that the Government will regret it.

Mr. W. S. Hilton: The hon. Gentleman is opposed to the Order because he says that it will cripple the building of new towns and various other essential building projects, but if I understand it aright the original legislation exempted houses. They will not, therefore, be affected by this Order.

Mr. Bessell: As far as my recollection goes—and no doubt the Minister will intervene to correct me if I am wrong—

the original Measure provided that any project which cost less than £100,000 would be exempt from the necessity of obtaining a licence. We are now going down to £50,000. This will certainly affect industrial development and commercial development, without which it is impossible for us to expect housing development to take place.

Mr. Prentice: The hon. Gentleman suggested that I might intervene to correct him. If I had corrected the previous speakers from that side of the House I should have been jumping up and down, because they were wholly inaccurate and wide of the mark. The hon. Gentleman will see that the exemptions include housing, industrial building, building by public authorities, and building in development areas. In fact the scope of the Act, and therefore the scope of the Order, applies to private building, which amounts to about 7 to 10 per cent. of the total building capacity of the country. If the hon. Gentleman bears that in mind, he will no doubt withdraw a number of things that he said.

Mr. Bessell: I am sorry, but the Minister has missed my point. Perhaps I have expressed myself badly. I cannot believe that the right hon. Gentleman is asking the House to believe—perhaps he is—that it is possible to put up large numbers of houses in areas completely isolated from all forms of industry and commerce, because that is the logical conclusion to be drawn from his remarks. It may well be, as the right hon. Gentleman says, that housing is exempt under the terms of the Act, but what I am saying is that it is impossible to expect there to be a development of housing on the lines which the Minister and his right hon. and hon. Friends have said they wish to see if we are to have these restrictions on other forms of development which are essential within any housing development, otherwise we will create an even more dangerous situation where we have people isolated from their places of work, and indeed we shall create not only transport problems, but many other social difficulties.
I do not want to delay the House for long on this. I have already said that we on this bench always had grave fears that an Order of this kind might be introduced. I am sorry that our fears have been realised, and I believe that


there is nothing in this Order which will either help the economy, or do anything to the benefit of the Government's housing and building programme generally. On the contrary, it will add to the uncertainty of the building industry, and could do grave damage in the long term to one of the most vital industries in the country.

11.9 p.m.

Mr. Bernard Braine: The Minister referred to this Order as a modest Measure. All those who have addressed the House so far have shown that its modesty is matched only by its irrelevance, but, as my hon. Friend the Member for Londonderry (Mr. Chichester-Clark) made plain, this Order, whatever else can be said about it, cannot be considered in isolation.
By now hon. Members on both sides of the House, however they may have voted in the Lobbies, must be aware of the confusion and uncertainty caused by the Land Commission Bill. That Measure has been described by one hon. Member as the product of an unholy union between compulsory acquisition and capital levy. My hon. Friend the Member for Crosby (Mr. Graham Page) has described it as a statutory bastard. I do not know whether that is strictly Parliamentary language, but it is a perfect description——

Mr. Deputy Speaker (Sir Eric Fletcher): Whether it is Parliamentary language or not, it is out of order to discuss it on this Order, the scope of which is very narrow.

Mr. Braine: It is precisely because that Bill gave rise to anomalies and injustices, one of which is brought out by this Order, that I want to refer to the matter. I hope that you will bear with me, Mr. Deputy Speaker. Some weeks ago one of my constituents drew my attention to an anomaly which arises directly out of this modest Measure, as the Minister described it. As I understand it, any purchase of property in the period from 22nd September last year to the first appointed day under the Land Commission Bill——

Mr. Deputy Speaker: Order. We cannot discuss the Land Commission Bill on this Order. We have had long discussions on the Land Commission Bill, and it has now had its Third Reading.

The scope of this debate is confined to this Order.

Mr. Braine: I am not trying to take advantage of the situation. I assure you that the anomaly in this case arises from the provisions of the Order, which reduces the building control limit from £100,000 to £50,000. I have had correspondence with the Minister of Land and Natural Resources on this point and he admits that this is a matter arising out of the Order, but I must relate my remarks to the provisions of the Land Commission Bill, because the two matters are closely connected. According to my constituent, in some cases where land was purchased between 22nd September——

Mr. Deputy Speaker: I do not see how the hon. Member can relate this argument to the provisions of this Order.

Mr. Braine: With great respect, Mr. Deputy Speaker, I am referring to a letter to the Minister of Land and Natural Resources in which I drew attention to the anomaly resulting from the Order which reduces the building control limit from £100,000 to £50,000. Unless I am permitted to explain why this is so I am not able to draw to the attention of the Minister the grievance of my constituent nor can I ask him to take the appropriate action. I am seeking redress for a constituent's grievance, which arises directly from the introduction of this Order.
My constituent says that in some cases where land was purchased for development other than for residential purposes between 22nd September, 1965, and the announcement lowering the licensing limit from £100,000 to £50,000, no start had been made or no contract had been signed before the relevant date of the Order reducing the building control limit to £50,000. Accordingly, if one assumes that the limit remains until after the first appointed day—and that is a fair assumption—no start can now be made in such cases. Therefore, when development starts there will be, in addition to the payment of the full development value in reasonable circumstances, a levy under Case C, with the purchase price not brought into account as the base value. This is clearly inequitable and unfair. This is the burden of my argument. I do not say that the anomaly arises in


many cases, but it has arisen to my certain knowledge in respect of one of my constituents.
I wrote to the Minister of Land and Natural Resources about this because it seemed to me that there was a possible way around this difficulty through an Amendment to the Bill. I wrote in sufficient time to enable the Minister, if he so wished, to amend the Bill. It would have been perfectly possible to have amended the Bill so as to allow the purchase price to be brought in as the base value when the full development value had been paid between 22nd September, 1965, and the time of the announcement lowering the building control limit, when the project would have started before the appointed day but for the effect of the Order lowering the limit. This is a demonstration of the enormous complexity of these regulations, arising out of the Land Commission Bill, with the uncertainties that has created, and now with this Order.
I told the Minister that, whatever the difficulties, the point should be met in order to avoid injustice. I had an astonishing reply. I had taken it that the Minister must have consulted the Minister of Public Building and Works, because the matter was one that concerned the two Departments. I can only assume that the latter must be aware of the point but, as I say, I had an astonishing reply. The Minister frankly declined to take any action. He admitted that there was a problem. He said:
There is no doubt that a number of developers have decided for one reason or another to buy during this interim period in the hope, or indeed the expectation, that they would be able to start but in the event, for a number of reasons—and the building control order may be only one such reason—they may not be able to start and they will therefore suffer the penalty for the risk they took when they bought the land.
There is the problem. It is admitted that some people may be faced with this difficulty and it is implied that in some cases there may be an injustice.
The Minister went on to say, in cold and, in my view, cynical terms:
I do not think that this is an anomaly; the possibility of this happening was inherent in the provisions and a great deal of publicity has, for this reason, been given to these provisions.
I know the Minister in question sufficiently well to say that that unfeeling

reply is quite uncharacteristic of him—and I have known him in this House for a good many years. I am prepared to believe that, on reflection, he would not be party to an injustice——

Mr. Graham Page: My hon. Friend will know that an Amendment was put down to the Land Commission Bill to relieve this hardship and to remedy this injustice, and that it was rejected by the Minister of Land and Natural Resources. I hope that the right hon. Gentleman will read that debate and see the matter fully explained there, as my hon. Friend is explaining it now.

Mr. Braine: I was aware of that, and I am grateful to my hon. Friend for his intervention. The reason why I am explaining this point now is that, having no redress from one source, I am now appealing to the right hon. Gentleman to see what he can do, bearing in mind that it is this Order that has caused this anomaly. That is why I make my appeal to the right hon. Gentleman to find some means of putting this matter right. I hope that he will do all he can either to cause his right hon. Friend to have second thoughts or to take some action himself. I am sure that the Government would be prepared to look again at a blatant injustice of this kind. I hope that the right hon. Gentleman will give me that assurance.

11.23 p.m.

Mr. A. P. Costain: At this time of evening I shall not repeat the arguments so well deployed by my hon. Friends, but I want to put certain questions to the Minister. Nine months ago today—and that is perhaps why my hon. Friend the Member for Crosby (Mr. Graham Page) referred to this Bill as a bastard—the then Minister of Public Building and Works said that the Government would produce this legislation. It was during that time that we pressed the previous Minister to make a lower limit. Will the Minister say quite honestly that if the limit had then been restricted to £50,000 he would have introduced a lower limit? Would he have done that, as his own previous Government did on 1st February, 1950, when they introduced a lower limit of £1,000? The first of the month is often considered to be a popular pay day for many people, but it seems to me that the first of


the month is control day for the Government.
The Minister, in introducing this Measure, did it less than justice, because although there is a controlled minimum of £50,000 he admitted, although he has not mentioned it now, that it is an aggregate of two years' total cost. Years of total costing having to be taken into account, and while we hear that this is the first occasion in peace time that a citizen can be sent to gaol, at least for such an offence, the Minister has also said that this would take some of the slack out of the economy.
We are concerned here not with areas which are development areas, but tourist areas, tourist resorts, which are being pressed by the President of the Board of Trade to do something different. We were told that we wanted more than 10 per cent. of the tourist trade, but in an area like Folkestone, one cannot take up the slack, so to speak, and also have the tourist trade.

Mr. A. J. Gardiner: We are told that certain areas are being refused, and that a number of objections have been accepted.

Mr. Costain: The hon. Member must believe that Whitehall always knows best, but when the House is asked to reduce this limit to £50,000 we must again weigh the effect of the evidence. Can the Minister produce evidence that projects estimated to cost £50,000 take less time to design than those estimated to cost £100,000? When and how will these controls be removed? Will the Minister refer to this future period? If the Minister had been at the R.I.B.A. presidential address this evening, he would have realised that the architects are worried about the effects of the cut-back on their staffs and, when private work starts up again, how they will be able to build their teams up again. I would ask the hon. Members for Liverpool, Walton (Mr. Heffer) and Bethnal Green (Mr. Hilton), who have great practical knowledge of the building industry, to talk to the Minister and make him realise that unless plans are drawn up in advance for projects when the freeze is lifted, months will elapse before work can start on the sites and unemployment will be caused.

11.25 p.m.

Sir Harmar Nicholls: I join in warning the Government that they are getting to the point where they may be completely demoralising the building industry, not necessarily because of the terms of this Order. If there is one industry which has to work in close co-operation with the Government, it is the building industry. Over the years so much contradictory advice has been given to the industry by the Government that the industry can hardly believe what it is told. If we are not very careful this great industry, which is the beginning of everything which we want in order to expand development, will be demoralised and unable to play its full part in the economy of the country.
I think the Minister himself feels this. His introduction of this Order was not very enthusiastic. He knows that his Department carries responsibility for the industry. He said that the effect of the Order did not amount to very much, that housing, public authority building and building in development areas was not affected and that the restriction applies only to 10 per cent. If the Order is to have such little effect, it is not worth the risk of contradicting all that his predecessor said when he was giving advice to the industry. We were told by the right hon. Gentleman's predecessor that the limit would not fall below £100,000. The building industry ought to be able to believe what it is told by the Government, but now we have this irrelevant window-dressing by the Prime Minister. In his statement on 20th July, the Prime Minister dragged this in to make his friends happy with talk about bingo halls. We have to look at the history of the matter and see how the brickmakers were told that they could make all the bricks that were needed, and then all that was thrown out of the window. We were told that £100,000 would be the limit and it would not be reduced.
The right hon. Gentleman knows that his job of trying to keep the building industry happy is being made more difficult because he is the bearer of this Order which is in flat contradiction to what his predecessor said. I am glad that my hon. Friends will vote against this Order, not because at this late hour we want to go tramping through the Division Lobbies, but to keep up the morale of the industry.


If the Government will not do so, we should let the industry know that we recognise its problems. By our vote we should let the Ministry know what our feeling is.

11.28 p.m.

The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. James Boyden): I do not know where the hon. Member for Londonderry (Mr. Chichester-Clark) got his facts about development areas, but only today I saw in the Scotsman, which, I presume, knows a certain amount about Scotland, and is not necessarily favourable to the Labour Party, an article headed:
Building Industry is Doing Well
London Brokers's Views".
The article said:
In an interesting and informative survey, Messrs. Mitton &amp; Butler, London stockbrokers, consider that the Scottish construction industry is enjoying high activity, particularly as nearly all of the country is outside the scope of deferments of Government and Local Authority expenditure announced in July. In this respect Scottish builders have an advantage over the rest of the United Kingdom.
The situation is helped by the pressure the Government is bringing upon housing authorities to speed up building programmes….
This, I should have thought, is very considerable evidence, which my Scottish friends could see with their own eyes, of what is going on in Scotland in relation to the building industry and to building.

Mr. Chichester-Clark: I am sure that they are admirable stockbrokers, but I do not see why London stockbrokers should be an authority on building in Scotland. I referred to the N.F.B.T.E. statement, which the hon. Gentleman should have seen.

Mr. Boyden: I thought hon. Members would be impressed by what London stockbrokers have said, but apparently I must revise my views.

Mr. Thomas Steele: Would my hon. Friend forgive me? As a Scotsman, I read this article and, in fact, people were being advised to put money into the building industry in Scotland.

Mr. Boyden: I am liable to be attacked from behind if my Scottish friends disagree with me, but I do not think they will.
In my own area in the North-East a factory building boom is going on. People are making applications for

I.D.C.s in considerable numbers. I am speaking from memory, but I think that in an Answer only a few days ago my right hon. Friend the President of the Board of Trade gave a figure of about 3·7 million sq. ft. of factory space being indented for in the future. So the factory building boom which is going on now will certainly continue into the period that hon. Members opposite were talking about. My own constituency, the Urban District of Bishop Auckland, has one of the biggest public building programmes, and there is similar activity in council house building throughout the North-East. In fact, the general impression is not at all what hon. Members opposite have said it is.
Several hon. Members have referred to licensing for hotels. They seemed to be making the point that almost all hotel building is being stopped. In fact, the system which my right hon. Friend described is to see that hotels go into the right place, that they are licensed if the local need exists and if the building industry is capable of doing the work. The figures show that up to 9th August 23 hotels worth nearly £8 million were authorised and only three hotels valued at £500,000 were turned down. In the period from the enactment until very recently several more hotels have been authorised, and the position is not at all as hon. Members opposite have said.
But there is something more basic than this. I think hon. Members opposite do a disservice to the building industry, as indeed some builders do, when they overpaint the picture of gloom. The hon. Member for Londonderry made great play about the reaction of the building industry to building control, but my right hon. Friend and I meet builders in various areas of the country. We read the technical Press fairly carefully, and it is quite remarkable how little criticism there has been about the Act since it was passed, either of the administration of the Act, or of the £100,000 level and the present level.
There is an article in Building, which makes certain critical remarks about the building industry. I dare say that the hon. Member for Folkestone and Hythe (Mr. Costain) has read it. Indeed, I am surprised that he did not quote some of it in another connection. In any case,


the reference to building licensing is certainly not adverse. Building, which is a very representative journal, says:
Building is not the only industry beset with problems; indeed, in many respects they are less than those being experienced in other prominent sections of the economy. There are no alarmist reports of redundancies or widespread unemployment; a considerable volume of building work is in progress notwithstanding the aura of gloom on the national scene.
Hon. Members opposite know what the economic situation is. This is a fairly reasonable indication that many people in the industry—and I think they are the less vocal and less political people in the industry—are not as depressed as hon. Members opposite would wish them to be. In fact, very often the sort of language that is used here has an adverse effect on the industry itself. The Ministry's figures seem to suggest that as a result of licensing the industry is approaching a period of stability. Following this period and when general economic conditions are more satisfactory, planned growth and movement forward will be possible, but not the violent movement forward which caused all the difficulties in 1964. Here is an indication of the sort of stability that is expected. The index of production in 1964, the over-heated year, was 135. In 1965 it was 138. It dipped in the first quarter of 1966, very much due to the weather, and it was back to 138 in the second quarter of 1966.
The level of orders for new work with contractors also indicates a fairly stable situation. New orders increased in 1963 and 1964 faster than the industry could cope with them. The situation was debated in the House several times, and I took part in those debates. In 1964 there was a peak of £2,583 million, at 1958 constant prices. In 1965 it was down to £2,438 million, but the interesting thing is that in the first seven months of 1966 it was £1,407 million, about the same level as in 1965. Last July, the last month for which we have figures, the figure was relatively better, and was about the same level as in 1965.
In other words, the industry is just about coping with what it can manage. I was astonished to read in a local newspaper today of the sort of situation to which my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) referred

in a comment to an hon. Member opposite about the pressure on skilled craftsmen, which still interferes with smooth building operations in a number of cases. Quite the contrary impression is given in this local newspaper article, which I did not ask for but picked up by accident. It refers to the situation in a town in the North-East. I shall give the hon. Gentleman the cutting afterwards. I do not want to draw special attention to it, for obvious reasons, but the local authority is facing grave difficulty in getting its council houses completed because of a shortage of craftsmen. Quoting the chairman of the authority's housing committee, the article says:
… it boils down to a serious shortage of bricklayers, plumbing tradesmen and other craftsmen who are tempted away by local industries offering greater scope and bigger money.
What follows is perhaps slightly less accurate, not in relation to the local area but to the country as a whole:
It's the same all over Tees-side, and just as bad down in the south. The only other answer is industrialised building.
The picture is not as hon. Gentlemen opposite are painting it, and the Order will do something to redress the balance.
Hon. Members opposite twitted me about a phrase I rather liked about unemployment in the building industry in the North-East. The fact is that if there is to be unemployment in the building industry it will not be because of the Order. It will be because of other economic circumstances which would have hit the area still worse if these measures exempting the development districts had not been introduced.
The hon. Member for Bodmin (Mr. Bessell) said that unemployment slack could be taken up by the unemployed being given work in the building industry. The difficulty is that the most vulnerable workers, the unskilled, are those who are first out of work, and the jobs which require the craftsmen to keep them in work are those which the Order will be licensing. The hon. Member also put forward the idea that new towns and industrial development would be hindered by the Order. That is not true. As my hon. Friend the Member for Bethnal Green (Mr. Hilton) pointed out, the exemptions are so wide that the realistic and important building activities—housing, research and industrial building


generally—will go forward. Those which are not considered so essential and which come under the Order will be licensed in the context to which he referred.
In other words, projects will be licensed when these are in the new towns or are other developments which are in the national interest and which the building industry can cope with. Even at 50 per cent., which is the highest figure so far in the restriction of licensing, it lets through a very considerable number of buildings in the national interest.
I shall gladly look into the case which the hon. Member for Essex, South-East (Mr. Braine) raised. If it is a matter of the date on which building is to begin, we shall give it very sympathetic consideration. I am not promising the hon. Gentleman that I shall agree with the case which he put. We have said all along that if there are cases of hardship caused by the change of date, we shall look at them sympathetically. If he will send me the facts of this particular case, I shall investigate them personally and, so far as I possibly can, endeavour to eliminate hardship.
To take that matter up as a general point, this is the way we have been administering the Order. I have not myself had any complaints of any particular hardship caused by the administration. The hon. Member for Londonderry knows that we promised this when the Bill was going through, and, from what I have

seen of the administration, we have fulfilled that pledge.

The hon. Member for Folkestone and Hythe said that architects were running out of work. I wish that some of them would join the local government service or come into the Ministry.

Mr. Costain: Does not the hon. Gentleman realise that half the architects are in the public service already? What more does he want?

Mr. Boyden: There are changes taking place in architects' offices, but the idea that architects are really in such a desperate plight is not borne out by the facts on the public authority side.
The hon. Member for Southend, West (Mr. Channon) asked me a blunt question about the effect on the balance of payments. Obviously, an inflationary situation in the building industry in the South-East or in London has an adverse effect on the balance of payments situation, and a general trend to avoid an inflationary tendency is bound to have a good effect on the balance of payments.
As my right hon. Friend said, this amending Order under the Act gives us more flexibility and much better opportunities to achieve a situation of planned growth, and I commend it to the House.

Question put:—

The House divided: Ayes 178, Noes 128.

Division No. 195.]
AYES
[11.42 p.m.


Abse, Leo
Craddock, George (Bradford, S.)
Gardner, Tony


Allaun, Frank (Salford, E.)
Crawshaw, Richard
Garrett, W. E.


Anderson, Donald
Cullen, Mrs. Alice
Garrow, Alex


Archer, Peter
Davidson, Arthur (Accrington)
Ginsburg, David


Armstrong, Ernest
Davies, Dr. Ernest (Stretford)
Gourlay, Harry


Atkins, Ronald (Preston, N.)
Davies, Harold (Leek)
Gray, Dr. Hugh (Yarmouth)


Atkinson, Norman (Tottenham)
Davies, Ifor (Gower)
Gregory, Arnold


Bagier, Gordon A. T.
Davies, Robert (Cambridge)
Grey, Charles (Durham)


Barnes, Michael
de Freitas, Sir Geoffrey
Hamilton, James (Bothwell)


Baxter, William
Dempsey, James
Hamilton, William (Fife, W.)


Beaney, Alan
Dewar, Donald
Hamling, William


Bennett, James (G'gow, Bridgeton)
Diamond, Rt. Hn. John
Hannan, William


Bidwell, Sydney
Doig, Peter
Harper, Joseph


Binns, John
Dunn, James A.
Harrison, Walter (Wakefield)


Bishop, E. S.
Dunnett, Jack
Haseldine, Norman


Blackburn, F.
Dunwoody, Mrs. Gwyneth (Exeter)
Heffer, Eric S.


Blenkinsop, Arthur
Dunwoody, Dr. John (F'th &amp; C'b'e)
Henig, Stanley


Boardman, H.
Eadie, Alex
Hilton, W. S.


Booth, Albert
Ellis, John
Hooley, Frank


Boyden, James
Ensor, David
Houghton, Rt. Hn. Douglas


Bray, Dr. Jeremy
Faulds, Andrew
Howell, Denis (Small Heath)


Brooks, Edwin
Fernyhough, E.
Howie, W.


Brown, Hugh D. (G'gow, Provan)
Fitch, Alan (Wigan)
Hughes, Roy (Newport)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Floud, Bernard
Hunter, Adam


Brown, R. W. (Shoreditch &amp; F'bury)
Foot, Michael (Ebbw Vale)
Hynd, John


Buchan, Norman
Forrester, John
Jackson, Peter M. (High Peak)


Buchanan, Richard (G'gow, Sp'burn)
Fowler, Gerry
Jeger, Mrs. Lena (H'b'n&amp;St. P'cras, S.)


Cant, R. B.
Fraser, John (Norwood)
Johnson, Carol (Lewisham, S.)


Coe, Denis
Fraser, Rt. Hn. Tom (Hamilton)
Johnson, James (K'ston-on-Hull, W.)


Concannon, J. D.
Galpern, Sir Myer
Jones, Dan (Burnley)




Jones, J. Idwal (Wrexham)
Mendelson, J. J.
Robertson, John (Paisley)


Kelley, Richard
Millan, Bruce
Rose, Paul


Kenyon, Clifford
Miller, Dr. M. S.
Ross, Rt. Hn. William


Kerr, Mrs. Anne (R'ter &amp; Chatham)
Milne, Edward (Blyth)
Rowland, Christopher (Meriden)


Kerr, Dr. David (W'worth, Central)
Mitchell, R. C. (S'th'pton, Test)
Rowlands, E. (Cardiff, N.)


Kerr, Russell (Felrham)
Morgan, Elystan (Cardiganshire)
Sheldon, Robert


Lawson, George
Morris, Charles R. (Openshaw)
Silkin, Rt. Hn. John (Deptford)


Leadbitter, Ted
Neal, Harold
Silkin, Hn. S. C. (Dulwich)


Lee, John (Reading)
Norwood, Christopher
Silverman, Julius (Aston)


Lewis, Ron (Carlisle)
Oakes, Gordon
Slater, Joseph


Lomas, Kenneth
Ogden, Eric
Steele, Thomas (Dunbartonshire, W.)


Loughlin, Charles
O'Malley, Brian
Swingler, Stephen


Luard, Evan
Orbach, Maurice
Thomas, George (Cardiff, W.)


Lyon, Alexander W. (York)
Orme, Stanley
Varley, Eric G.


Lyons, Edward (Bradford, E.)
Oswald, Thomas
Wainwright, Edwin (Dearne Valley)


McCann, John
Owen, Dr. David (Plymouth, S'tn)
Walker, Harold (Doncaster)


MacDermot, Niall
Page, Derek (King's Lynn)
Watkins, David (Consett)


McGuire, Michael
Palmer, Arthur
Watkins, Tudor (Brecon &amp; Radnor)


McKay, Mrs. Margaret
Park, Trevor
Weitzman, David


Mackintosh, John P.
Parkyn, Brian (Bedford)
Wellbeloved, James


Maclennan, Robert
Pavitt, Laurence
Whitaker, Ben


McMillan, Tom (Glasgow, C.)
Pentland, Norman
Wilkins, W. A.


McNamara, J. Kevin
Perry, Ernest G. (Battersea, S.)
Williams, Clifford (Abertillery)


Mahon, Peter (Preston, S.)
Perry, George H. (Nottingham, S.)
Willis, George (Edinburgh, E.)


Mahon, Simon (Bootle)
Prentice, Rt. Hn. R. E.
Winterbottom, R, E.


Manuel, Archie
Price, Christopher (Perry Barr)
Woodburn, Rt. Hn. A.


Mapp, Charles
Price, William (Rugby)
Yates, Victor


Marquand, David
Probert, Arthur



Mason, Roy
Redhead, Edward
TELLERS FOR THE AYES:


Mathew, Robert
Rhodes, Geoffrey
Mr. Neil McBride and


Mellish, Robert
Roberts, Albert (Normanton)
Mr. Ioan L. Evans.




NOES


Alison, Michael (Barkston Ash)
Grimond, Rt. Hn. J.
Onslow, Cranley


Allason, James (Hemel Hempstead)
Hall, John (Wycombe)
Osborn, John (Hallam)


Astor, John
Hall-Davis, A. G. F.
Page, Graham (Crosby)


Awdry, Daniel
Harris, Reader (Heston)
Pardoe, John


Baker, W. H. K.
Harrison, Brian (Maldon)
Percival, Ian


Balniel, Lord
Hastings, Stephen
Pike, Miss Mervyn


Batsford, Brian
Heald, Rt. Hn. Sir Lionel
Pink, R. Bonner


Berry, Hn. Anthony
Heseltine, Michael
Pounder, Rafton


Bessell, Peter
Higgins, Terence L.
Powell, Rt. Hn. J. Enoch


Biffen, John
Hiley, Joseph
Price, David (Eastleigh)


Biggs-Davison, John
Hill, J. E. B.
Pym, Francis


Black, Sir Cyril
Hobson, Rt. Hn. Sir John
Rees-Davies, W. R,


Blaker, Peter
Holland, Philip
Renton, Rt. Hn. Sir David


Bossom, Sir Clive
Hooson, Emlyn
Ridley, Hn. Nicholas


Braine, Bernard
Hunt, John
Rippon, Rt. Hn. Geoffrey


Briton, Sir Tatton
Hutchison, Michael Clark
Roots, William


Bruce-Gardyne, J.
Jenkin, Patrick (Woodford)
Scott, Nicholas


Bryan, Paul
Johnson Smith, G. (E. Grinstead)
Sharples, Richard


Buchanan-Smith, Alick (Angus, N&amp;M)
Johnston, Russell (Inverness)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Buck, Antony (Colchester)
Jopling, Michael
Sinclair, Sir George


Carlisle, Mark
Kimball, Marcus
Smith, John


Channon, H. P. G.
King, Evelyn (Dorset, S.)
Steel, David (Roxburgh)


Chichester-Clark, R.
Kirk, Peter
Stoddart-Scott, Col. Sir M. (Ripon)


Clegg, Walter
Knight, Mrs. Jill
Summers, Sir Spencer


Cooke, Robert
Lancaster, Col. C. G.
Taylor, Sir Charles (Eastbourne)


Costain, A. P.
Langford-Holt, Sir John
Taylor, Edward M.(G'gow, Cathcart)


Crowder, F. P.
Loveys, W. H.
Thorpe, Jeremy


Dalkeith, Earl of
Lubbock, Eric
Turton, Rt. Hn. R. H.


Dance, James
MacArthur, Ian
Wainwright, Richard (Colne Valley)


Davidson, James (Aberdeenshire, W.)
Mackenzie, Alasdair (Ross&amp;Crom'ty)
Walker, Peter (Worcester)


Dean, Paul (Somerset, N.)
Maclean, Sir Fitzroy
Wall, Patrick


Deedes, Rt. Hn. W. F. (Ashford)
Maginnis, John E.
Webster, David


Doughty, Charles
Mawby, Ray
Wells, John (Maidstone)


Elliot, Capt. Walter (Carshalton)
Maxwell-Hyslop, R. J.
Wells, William (Walsall, N.)


Farr, John
Maydon, Lt.-Cmdr. S. L. C.
Whitelaw, William


Fortescue, Tim
Mills, Peter (Torrington)
Wilson, Geoffrey (Truro)


Foster, Sir John
Mitchell, David (Basingstoke)
Wolrige-Gordon, Patrick


Gilmour, Ian (Norfolk, C.)
Monro, Hector
Wood, Rt. Hn. Richard


Gilmour, Sir John (Fife, E.)
More, Jasper
Worsley, Marcus


Glover, Sir Douglas
Morrison, Charles (Devizes)
Younger, Hn. George


Goodhew, Victor
Munro-Lucas-Tooth, Sir Hugh



Grant, Anthony
Murton, Oscar
TELLERS FOR THE NOES:


Grant-Ferris, R.
Nicholls, Sir Harmar
Mr. R. W. Elliott and


Cresham Cooke, R.
Noble, Rt. Hn. Michael
Mr. Reginald Eyre.


Griffiths, Eldon (Bury St. Edmunds)

Resolved,
That the Building Control (Cost Limit Exemption) Order 1966 (S.I., 1966, No. 997),

dated 9th August, 1966, a copy of which was laid before this House on 10th August, be approved.

INDUSTRY, WALTON (NOISE)

Motion made, and Question proposed, That this House do now adjourn—[Mr. Charles R. Morris.]

11.51 p.m.

Mr. Eric S. Heffer: The subject of this Adjournment debate is the problem of excessive noise in certain areas of the Walton constituency. I want to make one very brief remark—it has nothing to do with prisoners knocking on the doors of Walton Prison trying to get out! The noise and the nuisance about which I shall speak are from industrial premises which have been developed in residential areas.
It is not a new problem and it is not confined to the Walton constituency in Liverpool, but the examples which I shall give both underline the general problem and show the need for further action in those cases. Walton constituency is an area of mixed development. It has a number of factories mixed in among houses, particularly in the older residential areas. The three specific examples which I have in mind are the most serious, but there are others.
I cannot do better than quote from a letter which I received from the Town Clerk of Liverpool, dated 29th July, 1966. The letter reads:
The premises of Taylor's Bakery, Spratts Patent Limited, and Reads Limited, are all old established industrial premises in the Walton Area. When the City Council prepared its Development Plan, under the provisions of the Town and Country Planning Act, 1947, it was anticipated that the premises would remain in industrial use for the period of the plan, i.e., 20 years, and for this reason they were shown on the Plan as being zoned for industrial purposes. When the Plan was approved by the Minister in 1958 zoning of the premises as industrial was confirmed.
The roads affected are Richie Avenue, Immeson Street, Bull Lane and adjoining roads.
During the past few years, all these factories have been extended and new plant has been installed. There are night shifts in two of them and there is often late overtime working in the third.
This causes a great deal of annoyance, and I would say, misery, to the people living locally. Before the expansion of the factories the level of noise was tolerable. Since the expansion, with the new plant, the people in the locality have

suffered considerably as a result of the increase in the volume of noise. Especially is this true at night. To some people, and this has been medically proved, excessive noise, especially a constant vibration and hum, is the equivalent of physical pain. I have received petitions and representations from the people in all of the areas close to the factories involved and I have visited the areas affected, even at night.
I have made representations to the local authority and the medical officer of health has been very active in this matter. I have also visited two out of the three managements and some action has certainly been taken. There are snags and difficulties and the law requires to be considerably strengthened. In the case of Spratts' factory, the firm is carrying out work which will reduce the noise, at a cost of £5,000. The other factories have also carried out work to reduce noise, but the truth is that while night shifts are worked, the noise, even though reduced, will continue. In a letter dated 27th October, Professor Andrew Sample, the Liverpool medical officer of health, said:
I am of the opinion that the main complaint in this particular case is the situation of the factory and complaints will still be made, even if the present work proves satisfactory. I think that this complaint has placed on the Health Department a burden which should have been avoided at the planning stage instead of leaving the Department to try and solve an almost insuperable problem. Nevertheless, my Chief Health Inspector and his Department will persevere until every possible step provided by legislation has been tried.
I am not criticising the Health Department or the efforts made by the various firms concerned. The truth is that the law as it stands is not effective enough. I also believe that in the past the Ministry has too readily given its consent for planning permission. Let me give a quotation from the Digest of Planning Decisions on Industrial Development 1959:
Again the Minister on appeal granted permission, subject to certain conditions, for the erection of a workshop for use in connection with a sheet-metal works, notwithstanding that the works was badly situated, being in an old-established residential district. Redevelopment of the area was not imminent and the local planning authority appeared not to be intending to secure removal of the industry within the foreseeable future.
I raised with the local authority the question of whether the night shift in


the case of one factory could be removed. The reply was as follows:
You will remember in my letter, dated 22nd June, I informed you that the management were being requested to close down the night shift and a top level conference was arranged with the senior directors … who came down especially for the conference, when the request was put to the management. They communicated with their head office and the Department was informed that the whole factory has been geared to a 24-hour output and if the night shift closed down the factory would not be economic, which would certainly give rise, if not to a complete shutdown, then to a considerable redundancy problem.
We already have more than enough unemployed in Liverpool and I have no wish to see further redundancies, but I equally wish to see my constituents living happily and in a relatively peaceful atmosphere.
The real point is that these extensions and developments ought not to have taken place. I suggested to the City Planning Department that possibly the firms could be relocated on one of the industrial estates. Unfortunately, this is no longer a feasible proposition, but it might have been possible had the idea been mooted at the time the firms applied for permission to extend their premises.
It might be suggested that the firms can be prosecuted under the Public Health Act. That could be done, but the medical officer of health, in a letter to me dated 16th September, said that he felt that it would be useless. The letter says:
With regard to your inquiry concerning the legal position, I enclose a copy of a recent case concerning similar problems taken in London. You will notice the case was dismissed yet the level of the noise nuisance in the case would be considerably higher than the noise which will come from the above factory when the works have been completed.
That case was heard at the St. Albans Magistrates Court on 1st June, 1966, and was brought under Section 94 of the Public Health Act, 1936. Let me quote from the report. It says:
Dr. G. D. Best, clerk of the Council, appeared for the Council, and evidence was given by the senior public health inspector, Mr. J. Snowdon, together with three residents living near the factory concerned, all of whom were affected by the noise, particularly at night. Mr. Snowdon stated that complaints about noise from the factory started in the latter part of 1964 and despite remedial measures carried out by the company he was satisfied that a nuisance existed, particularly during the hours

of darkness. He had taken noise level readings at night from various locations, and these readings varied between 38 dBA and 44 dBA. Appearing for the defendants, Mr. Gerald Lawson, Q.C., outlined the measures which the company had taken to reduce the level of noise coming from the factory and indicated that it was essential to operate the factory for 24 hours each day. Supporting evidence was given by the managing director and a representative of a firm of noise consultants. The Magistrates dismissed the case but no order was made as to costs. The Council subsequently decided not to appeal against the decision.
That, then, is the problem. The people in my constituency were very happy living in their homes, the factories were extended and now their lives have been transformed. In many respects, their lives are a misery due to the noise, especially at night.
I am therefore asking the Minister to do a number of things. First, will he look at the existing law and see if it can be strengthened to give greater protection to residents affected by such developments. Secondly, will the Minister assure me that before planning permission is granted for extensions, etc., to existing industrial premises in built-up areas, a most careful scrutiny will be carried out to see what effects the extensions are likely to have on noise levels, thereby causing great unhappiness to local residents? Thirdly, will the Minister set up a thorough-going inquiry into the particular cases which I have raised, with a view to the adoption of even greater measures to relieve my constituents of the noise? Lastly, will the Minister urge all local authorities, and the Liverpool City Council in particular, to make certain that, before such permission is given in the future, they will suggest that firms develop their factories on industrial estates away from the residential areas?

12.4 a.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Robert Mellish): It is some considerable time since this House has had the opportunity of considering industrial noise, and we are therefore indebted to my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) for having raised the subject this evening. I should like to congratulate my hon. Friend for the very able and lucid way in which he has explained to the House the serious annoyance to which many of his constituents are being subjected.
I do not intend in my reply to minimise the extent of the nuisance which my hon. Friend's constituents are suffering. Industrial noise is a problem which concerns us greatly at the Ministry. We could ourselves provide a considerable volume of evidence that it is causing widespread annoyance, and we are determined that greater attention must be given to the reduction of such nuisance. As standards of living rise, our willingness to put up with noise falls, and rightly so. As many as two-thirds of all the complaints about noise that we receive in the Ministry relate to noise from industry. Most of the complaints relate to noise from much the same kind of long-established industrial firm as the one which my hon. Friend has mentioned tonight.
One of my right hon. Friend's major Departmental responsibilities is town planning, and in planning control a great deal is being done to ensure the proper siting of these new factories which of necessity must produce noise. Public health authorities should always be consulted where a new industrial building is likely to be used, or could be used, for a process which would give offence to its neighbours, and I commend this practice of consultation to authorities which may not yet have adopted it. We have a great responsibility to do all in our power to ensure that we do not bequeath to the generations to come the kind of problems which we have inherited and are discussing tonight.
Whilst planning can do much to prevent the disturbance caused by new industry, nothing short of redevelopment is likely to deal effectively with problems which arise where existing factories are cheek by jowl with dwellings. Urban development schemes, and the present extensive slum clearance and rehousing programmes, are already doing much to diminish the difficulties, but these are long-term solutions. In the short term, the problem is too vast to be solved by these methods, so the main hope for the many thousands of citizens who must continue to live, perhaps for many years, in the close vicinity of noisy factories must lie in the efficient exercise by the public health authorities of the statutory powers which are available to them in the Public Health Acts and the Noise Abatement Act, 1960.
As a result of the Noise Abatement Act, any noise or vibration which is a nuisance is now a statutory nuisance for the purposes of the Public Health Act, 1936. The effect of this is to enable local authorities to abate noise nuisance, including industrial noise nuisances, by serving abatement notices on the offenders.

Mr. Julius Silverman: Is not there an important qualification to this provision in the Noise Abatement Act, namely, that if the firm can prove that it has taken all the steps that it can to abate the noise, short of removing the process, it has a defence? This happened in the case to which my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) referred.

Mr. Mellish: My hon. Friend is quite right, and this is a fair point. In the St. Albans' case the defendants put forward this statutory defence, and it was successful. They said that they had taken all practical measures to prevent and counteract noise, and it was on the basis of this that the magistrate dismissed the case. I was, however, going on to say what else the Government were doing to try to deal with this problem.
I was talking about the service of abatement notices on offenders, and I was about to say that if the notices are not complied with the council can seek to have them enforced in the magistrates' court. The two Acts also allow three or more occupiers of premises who are aggrieved by a noise nuisance to start court proceedings independently if the local council is not willing to act.
In the case of a factory or business, it will often be impossible for the management to abate all forms of noise. Company resources are not unlimited, even in the wealthiest cases, and beyond a certain point it will be quite uneconomic for a firm to carry out the work. Our economy could not stand widespread industrial closures because of noise, and for industrial nuisance the statutes provide that it is a defence in abatement proceedings for the defendants to prove that they have used the best practicable means for preventing and for counteracting the effect of the nuisance—the point which we were talking about earlier with regard to the St. Albans' case.
The position of local authorities under the Noise Abatement Act is that before serving an abatement notice against a noisy factory they must be satisfied that the conditions complained of are serious enough to amount to a statutory nuisance. They are precluded from acting if they take the view that the firm could not reasonably be expected to take further preventive measures to reduce the nuisance which is being caused to local residents.
In two cases known to us in my hon. Friend's constituency, the local authority concerned is the Liverpool Corporation. I understand that the view it takes after careful investigation, is that the firms in question are carrying out all practicable remedial measures to keep the nuisance from their premises to a minimum. The Corporation does not, therefore, feel in these cases that it can reasonably ask the owners to do more. The company was also trying, privately, to secure the rehousing of some of the tenants closest to their premises and, on this proposal, I am told that the firm has so far purchased three of the affected houses and is trying, with some difficulty, to negotiate the terms for a further 17 houses.
In the case of the factory at Long Lane, the Minister has received a full report from the Corporation in the last few days, and the management is doing all that can be expected. Something like £5,000 is being spent on sound-proofing, and other works, and windows are being sealed with appropriate materials and a large baffle wall is being built inside the factory.

Mr. Heffer: The local authority is now rehousing some of the employees.

Mr. Mellish: The local authority has received a full report about the factory and I am informed that something like £5,000 is being spent on sound-proofing. It is not a matter in which my right hon. Friend can intervene. He has no legal powers, and the Ministry's function is to hold a watching brief and to act mainly as a channel for complaints from the public, about which inquiries have to be made of the local authorities who have the executive power.
Local authorities do not always have the final word on the matter of noise, and members of the public can complain

directly to the courts. There are two procedures, and in the case referred to, it would be open to my hon. Friend's constituents, if they thought that more could be done to reduce the noise, to invoke a complaint under the Public Health Acts. Alternatively, any one of them is at liberty to bring a civil action. In a civil action the defence, "the best practicable means", would not be available to the defending firm, but this sort of action can prove costly and I would not recommend that it should be entered into lightly and without the most careful thought.
The present working of the Noise Abatement Act was one of the matters considered by the 1963 Wilson Committee on Noise. This Committee reported that the problems of dealing with industrial noise were high among the matters causing most concern to local authorities. In general, however, the Committee could see no alternative to the present law of nuisance as the remedy where prevention fails, or where it cannot be undertaken for one reason or another.
It is our intention that a circular giving guidance on the subject of industrial noise should be issued shortly to local authorities affected. This circular, which will also deal with some other recommendations in the Wilson Report, will request authorities, before taking action against noise from industrial premises of whatever kind, to consult the local Factory Inspectorate. The Factory Inspectorate has responsibilities for the health of workers under the Factories Acts, and the Offices, Shops and Railway Premises Act, 1963. They should, therefore, often be able to provide local authorities with useful advice or, alternatively, to suggest the best resources for which specialist advice can be obtained.
A further recommendation of the Wilson Committee was that steps should be taken to establish a simplified procedure for giving a reasonably reliable guide to the probable public reaction to industrial noise. I hope that this recommendation will shortly be implemented. The British Standards Institution is considering a draft British Standards method of rating industrial noise affecting mixed industrial and residential areas. When this new standard is approved for publication, it should result, if adopted generally by public authorities, as I hope it will be,


in the more consistent treatment of industrial noise from area to area.
I said in my opening remarks that I would not seek to minimise the nuisance which my hon. Friend's constituents are suffering. Nor do I make any pretence that it is possible in present circumstances to do much more to bring them early relief. I regret that no quick or easy solution is at hand. But I hope that I have reassured the House that progress is being made towards solving this problem on a number of fronts. In new industry and planning there are great opportunities, which we are taking and will continue to take. In existing industry we hope that by harnessing the expertise of the Factory Inspectorate to the ever-growing experience of the local authorities we shall ensure that everything that can be done will be done to keep industrial noise within reasonable bounds. The long-term and only final answer lies, as I have said, in our plans for new housing and the redevelopment of our outworn cities; we intend to press on with these with all the speed that our resources allow.
My hon. Friend referred to the planning aspects of these matters. There are no specific instructions to local planning authorities to take account of noise when considering planning applications. It is, however, well understood by all concerned that noise, together with any other amenity elements, is a material consideration to be taken into account when applications for planning permission are being dealt with. The fact that amenity is taken very seriously is shown by the provisions of Section 28 of the 1962 Act, which specifically refers to the interests of amenity as being one of the factors to be taken into account by local planning authorities in considering whether discontinuance proceedings should be taken.
Further, the Town and Country Planning (Use Classes) Order, 1963, distinguishes clearly between light industrial and general industrial building by de-

scribing the former as being the one where the process can be carried on in a residential area without detriment to the amenities of that area by reason of noise, vibration, smell, and so on. No transfer from light to general industrial activity can take place without planning permission.
I said earlier that we shall send out this circular. It is our intention to increase the amounts which courts can fine firms who are guilty of any offences. We will do what we can, by way of calling the attention of local authorities to their rights in this matter. I cannot promise my hon. Friend any legislation—indeed, on Adjournment debates it would not be in order to talk of new legislation but I can say, if it is any comfort to my hon. Friend, that he is talking to someone here tonight who has exactly the same problem. My constituency is one of the victims of the Industrial Revolution at the turn of the century, where firms and houses were mixed together. It is a problem that I have to live with every day. It seems only yesterday that a great housing estate built in my constituency was hailed by everybody as a triumph. We now know that this was one of the greatest planning disasters of the time, because it should never have been built there. It is an industrial area. My hon. Friend certainly has my sympathy and my support to help him.
It is to his credit that he has taken the time of the House at midnight to raise a matter which may appear trivial on the surface but which, to his constituents and to him, is very important. I thank him for doing so, and I assure him that the resources of my Department will be available to him and his Corporation to do what we can to help solve this very difficult problem.

Question put and agreed to.

Adjourned accordingly at nineteen minutes past Twelve o'clock.